With hundreds of companies jockeying for your
business, it can certainly be a daunting task choosing one. When you incur huge
amounts on your credit cards and you become tired of catering to multiple
creditors, you immediately think of consolidating your debts through a
professional company. There are many debt consolidators who pose to be
trustworthy companies but once you sign up with them, they start showing their
true colors. Either they charge you hefty upfront fees, or ask for frequent
payments or avoid reporting your payments to the credit bureaus, thereby
leaving you with a tarnished credit score. If you don’t want to face such
consequences after signing up with a debt consolidation company, you should
perform some checks so that you don’t end up choosing a wrong company. Here are
some of them.
1. Check their BBB
registration: If you are shopping around for debt
consolidation companies and you get some that seem to be good, all that you
need to do is to type their name in the official website of BBB or the Better
Business Bureau. There are instances where one among 13 debt relief companies
in San Francisco is registered with the BBB, that too without any rating.
Likewise, there are many companies that are not rated, due to lack of
information. If you come across such a debt consolidation company, you should
avoid seeking help of them as there are possibilities of you getting scammed.
2. Check their AICCCA
registration: Apart from the BBB registration, you
should also check if the company that you’re about to work with is registered
with the Association of Independent Consumer Credit Counselling Agencies or the
AICCCA. Even if the hold a NFCC or National Foundation of Credit Counselling
certificate, you may take it as a positive sign towards measuring its
authenticity. If they’re registered, check for some feedback about that
company.
3. Check the fee structure
of the company: Did you know that apart from the BBB
registration and NFCC accreditation, the fee structure of the company is yet
another factor that can speak about the trustworthiness of the company?
According to the FTC rules, no for-profit company can charge you any kind of
unnecessary charges or upfront fees before reducing or revising a certain
portion of your debt. So, if you see that the company that you’re working with,
charges advance fees, you can be sure that they’re going to scam you.
4. Check their non-profit status:
If you wish to get help of a non-profit debt consolidation company, you should
first verify its status. The debt consolidation consultant should be able to
show you their non-profit certificate awarded to them by the IRS. It is called
by the 501(3) (c) certificate and if you don’t get to see such a certificate,
don’t work with that company.
Hence, when you’re not being
able to cope up with your surging debt burden, you can get help of the reputable
debt consolidation companies.
Perform the above mentioned checks to stay off the cycle of further debt and
secure your financial life.