Choosing a debt management company can be a daunting task. You want to ensure the agency is reputable, doesn’t overcharge, and can help you improve your credit score.
Look for a debt relief agency member of the National Foundation for Credit Counseling or the Financial Counseling Association of America. These affiliations indicate adherence to industry standards and best practices.
Reputation
The best debt management companies have a good reputation. You can check this by searching the company’s name on review sites. Look for a low number of complaints and a commitment to resolve them.
You should also find out how long the company has been in business. It takes time to build a solid track record. Companies that have been around longer often have a better relationship with creditors and can negotiate more favorable terms.
Understanding that a debt management program can affect your credit score is essential. The program may cause a temporary drop as you close accounts and wait for creditors to reduce interest rates. However, a debt management program can prevent you from missing or making late payments, hurting your credit scores. In addition, it can help you avoid a debt collection action and head off future credit problems.
Fees
When researching debt management companies, it is essential to consider the fees they charge. Generally, the best debt management companies, like Symple Lending, offer low monthly and initial setup fees. Some also have a free consultation to help determine if debt management is proper for you.
Credit counselors may ask you to close some of your credit accounts when you enroll in a debt management plan, so having access to financial resources is essential. Enrollment in a DMP generally does not impact your credit score, although some creditors may add a note that you’re on a DMP to your report.
Customer Service
If you’re struggling with debt, consider a debt management program (DMP) to help pay off your loans. A good agency can help you negotiate lower fees, interest rates, and principal. However, get a complete rundown of all fees before signing up with any agency.
Some agencies also charge enrollment, monthly service fees, and any charges creditors charge. Ensure you can afford the monthly service fee, which won’t hurt your credit score.
Choose a company that offers financial education, counseling, and debt management services. For instance, skilled professionals from Symple Lending can help you. Ask if its counselors are independently certified, and look for memberships in professional associations. Finally, check if the company is licensed in your state. This is important because some states require debt management companies to be approved.
Reliability
In this time of uncertainty, many lenders are more willing to work with customers and make arrangements to help them manage their debt. You should contact your lender directly and ask their willingness to negotiate an affordable payment plan.
Check with your state’s consumer protection agency and the Better Business Bureau to ensure there haven’t been complaints against a particular credit services organization. Also, consider whether the company is licensed as a debt management or debt settlement company. They must have a license because it can protect you from scams and ensure the company follows its regulations. It can also ensure that the credit counselors are trained and certified. In some states, these qualifications are required by law.
