Debt consolidation companies should not be treated equally. Contrary to what many people think, they are not all the same and do not all offer the same services. Take the time and research companies so that you can ensure you have found one that you are not only comfortable with but that will also meet your needs.
Some of these businesses make it their business to help you pay off all of your debt and clean your credit history. Others unfortunately are nothing but scams. One way that you can fight back and protect yourself is to compare these businesses online.
One of the first considerations is if you should choose from a non-profit or a for-profit business. Although there are many different non-profits that are legitimate, those that are guilty of fraud often claim to be a non-profit when they file taxes. The way a company chooses to file their taxes is one of the only differences between the two.
Non-profit businesses are funded by creditors which in turn is beneficial to the consumer because it helps to reduce or even eliminate any fees. This is primarily the case with those businesses that have been set up to assist consumers that have poor credit ratings. For-profit businesses that are legitimate will be willing to offer comparable rates to the consumers.
For profits will typically only work with the consumer that still has a credit score that is good. Either one of these businesses will work to reduce interest rates. This will work to make a repayment plan that will be uncomplicated and affordable.
Commonly referred to as the litmus test, request a monthly quote from the agencies that you find on the Internet that appear at first glance to meet your needs. Essentially all agencies should be able to obtain the same interest rate for you. Any of these agencies that are charging an extremely low fee should be avoided. Although this seems backwards, it is an indication of an agency that may be looking to scam the consumers.
Debt consolidation companies should provide other services to you as well. If you ask and they will not tell you what other services they offer, they should be eliminated from your list. A reputable organization should be willing to work with your creditors on a continuous basis to reduce rates, remove any late fees and even close accounts. Organizations offering debt settlement or that offer help in filing for bankruptcy should also be passed up on. These services are damaging and should only be a last resort.
