Comparing Debt Management Companies
How to determine which debt management company is the best based on your needs.
Reaching out for help with your finances can be tough. Most of us would prefer to solve financial challenges on our own, but that’s not always possible. And when it’s not, procrastinating and putting off getting help only brings more debt to eliminate. It’s in your best interest to be decisive and ask for help as soon as possible.
So how do you choose between one debt management company and the next? These three tips can help you compare companies effectively to find the right fit for your needs. If you have questions or would like to talk to a counselor to see if Consolidated Credit is right for you, call us at ! You can also complete an online application to request your consultation now.
Tip No. 1: The BBB should be your first and best source for information
The Better Business Bureau is your best source of information on debt management companies. Credit counseling agencies receiving BBB ratings and complaints can be logged against companies that aren’t up to par. Ideally, you want a company that consistently maintains an A or A+ rating with the BBB. This rating means the company is known and recognized as a reputable service provider. They also either don’t get a large volume of complaints or they answer any complaints promptly.
For the record, the BBB should be used to evaluate most financial service providers. From financial planners to investment advisors, financial professionals receive evaluations and accreditations in most cases. The only industry that this doesn’t apply to is credit repair. Credit repair as a whole varies widely in promises made and results. As a consequence, the BBB does not even evaluate these companies. That’s not to say you can’t find a reputable company to perform credit repair services. You just have to rely evaluation measures like the two below.
Tip No. 2: Only use independent third-party testimonials
Knowing what past clients say about a company matters. But you want to make sure that the testimonials you read are real and balanced. A company isn’t likely to publish unfavorable reviews on their own website because they want to put their best foot forward. So you are less likely to get the real story if you focus only on the testimonials you read on a debt management company’s website.
Make sure to check independent, third-party reviews from a company review website that publishes the bad with the good. Keep in mind that any business that’s been around for a while is likely to have some bad reviews. You want to see how debt management companies respond when they receive complaints. Are steps taken to resolve bad experiences? Sometimes seeing how a company responds to negative feedback is more valuable than an assortment of positive reviews.
Tip No. 3: There’s no harm in a single phone call
The first consultation with a credit counseling agency (the organization that runs debt management programs) is almost always free. This is especially true if you work only with nonprofit credit counseling agencies. By law they are required to provide basic credit counseling advice completely free of charge.
This gives you a great opportunity to test the waters with different debt management companies. Call each of the companies you’re considering for a free evaluation. See what they say, what they recommend for your debt and how your program would be set up. Monthly payments and fees should be largely the same from one program to the next. Fees are generally based on state regulations and payments should be based on what you can afford.
Even though the programs should be consistent, the service won’t be. You want to get a feel for the agency and their credit counselors. Are they knowledgeable? Are they only pushing a debt management program and keeping quiet about other potential solutions?
A good credit counselor will explain all of the solutions you have available and help you compare them. You should feel like you’re in good hands by the end of the conversation. If you don’t, then you should look to other companies to find what you need.
What happens when debt management companies change?
One final note about debt management companies is that a company may close or change names during your program. This is especially true if you choose a smaller credit counseling agency to work with. If this happens…
- Don’t panic. Just check to make sure the new company has a high rating with the BBB and good reviews. Go through the same steps to vet agencies that are listed above.
- Talk to the agency about the switch. When you call the company to make sure your payments will still be processed accordingly, inquire about the change. Get details on why the change occurred and if you should expect anything different moving forward.
- If you’re not happy, move. If you don’t like your new provider, then find a different company and ask them to move your program over. You may just be able to move your plan as is or get a new plan that works for your budget.