From student loans and bankruptcy to credit loans and medical bills, debt can often become a crippling situation. Not only is it a tough hamper on your financial freedom, but it also lowers your credit score, your ability to take out new loans, present a good financial application, and more.
Plus, the higher the interest rate is, the more your debt will only continue to grow. That means you’ll have to pay far more than what your item actually costs and might spend decades doing so, if not your entire life.
When it comes to your credit score, over 30 percent of it accounts for how much debt you’ve accumulated. That directly impacts your candidacy for owning a home, making ends meet, securing a good mortgage, and saving up for retirement. Along with the extra stress it can add to your life and marriage, debt overall prevents you from achieving your financial goals.
You might think that your debt will forever linger with you as you get older. However, there is a solution. It comes in the form of a debt relief company. These companies work as for-profit businesses on your behalf to get your creditors to lower the amount of debt you have to pay. The ultimate goal is to help you pay off your debt sooner rather than later.
Even though debt relief companies may sound like a miracle come true, don’t jump for the skies just yet. Many companies out there make promises that they can’t keep or use dangerous practices that could seriously jeopardize your financial and credit standing. To ensure that you’re working with the right service provider, here are 7 considerations that you should pay attention to before choosing a debt relief company.
When it comes to debt relief, most debt relief companies will practice either debt consolidation or debt settlement. Depending on what method the company uses, it might have eligibility requirements on who it can serve based on a few conditions.
For one, evaluate whether you have secured or unsecured debt. Some companies will accept one or the other and other companies may accept both. Additionally, they might also ask that you have a minimum or maximum amount of debt to pay off.
In general, debt consolidation companies won’t have minimum debt requirements. As long as you fit between that range, you qualify for that debt relief service and can go ahead in contacting the specific company.
2. Credibility and Trustworthiness
To ensure that you’re not the next victim of a widespread financial scam, make sure that you are working with a legitimate company to avoid any type of fraud or terrible disappointment.
You can start by evaluating the staff of the company. The consultants should be trained and certified in debt settlement or consolidation to work with you. Another sign of legitimacy is if the service provider is accredited by a consumer or industry organization such as the Better Business Bureau, the American Fair Credit Council, or the International Association of Professional Debt Arbitrators.
These organizations signify that the company has undertaken training, certification, or has met the industry standards and customer protection requirements.
3. No Upfront Fees
Even though some companies may require that you pay monthly fees or setup fees, you should never have to pay them until your debt has been settled. In general, debt relief companies should only require you to pay once your debts have at least been reduced.
If you come across any company that demands you to pay an upfront fee without having actually tried to lower your debt, you should take that instantly as a red flag and stay away at all costs.
4. Track Record
As you do your research, always look up the track record of a company and use your best judgment to determine if they are trustworthy. There are several questions that you want to ask and keep a note of as you narrow down your selection.
For instance, how long has the company been in business? The longer the better. Does the company have the right experience for your unique debt situation? Clearly evaluate your debt and see if the service is available. How long should it take to get a positive result? Make sure that whatever the company says is realistic. Always follow through with due diligence before rushing into the process.
5. Past Results
You don’t always want to take the company’s word for complete fact and truth. Instead, use Google as your resource to look up important outside information regarding the company. Customer reviews are a great place to start. They can offer you key insights into how successful the services are.
Next, you’ll also want to check if the company has had any major recent lawsuits or government actions done against it. These are obvious red flags that can show you the past mistakes a company has gotten into before and can help steer you away from bad business.
6. Clear Contract
No matter what you do, make sure that the company provides you a clear written contract that includes everything the service can offer for your situation, including the scope of the service, the expected turnaround time, your legal rights, your overall cost, and anything else that pertains to your needs.
As soon as you receive that contract, read it as closely as possible to determine that there aren’t any tricks or scams up their sleeves. It’s the surefire way to ensure you’re working with an honest business.
7. Reasonable Cost
A good and reliable debt relief service will always offer a free consultation to discuss realistic solutions, so always take advantage of that. At your consultation, these companies are often straightforward about their costs and fees.
It’s your job to compare these prices to the industry standards by doing diligent research and making sure that you aren’t being cheated out of any money. Don’t forget that you should never have to pay anything until your company has produced results for you in the form of reduced debt.
In knowing all these factors, you’re now empowered to find the most reputable debt relief company and make the best of your situation. It’s time to take charge of your financial situation and work your way toward a debt-free life.