Comparing Debt Management Companies

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 become debt free on our won, but that’s not always possible. When it’s not, putting off dealing with credit card debt and procrastinating only increases your debt load, while decreasing your credit score. It’s in your best interest to be decisive and ask for help devising a debt management plan 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 counsellor to see if Consolidated Credit is right for you, call us at 1-844-402-3073! 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 counselling 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. The credit repair industry varies widely in promises made and actual results. That is partly because there are many debt consolidation options available with different outcomes and criteria. Therefore, 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 must rely on 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 its own website because they want to put their best foot forward. You are less likely to get the real story if you focus only on the testimonials you read on a 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 companies respond when they receive complaints. Are steps taken to resolve bad experiences? Do any reviews mention the array of debt solutions the company has to offer? Sometimes, seeing how a company responds to negative feedback is more valuable than an assortment of positive reviews. In addition, look for reviews that mention good counsellors who genuinely want to help you deal with your debt.

Tip No. 3: There’s no harm in a single phone call

The first consultation with a credit counselling agency (the organization that runs debt management programs) is almost always free. This is especially true if you work only with nonprofit credit counselling agencies. By law, they are required to provide basic credit counselling advice completely free of charge.

This gives you a great opportunity to test the waters with different organizations. Call each of the companies you’re considering for a free evaluation. See what they say, what they recommend for your type of 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 government regulations and payments should be based on what you can afford.

Even though the programs should be consistent, the service may not be. Get a feel for the agency and their credit counsellors. Are they knowledgeable? Are they only pushing a debt management program and keeping quiet about other potential solutions? Or are they asking questions to learn more about your financial situation? A DMP isn’t the only solution, so ask about:

  • Whether you should consolidate your debt
  • If you should seek a line of credit
  • Consumer proposals
  • A debt consolidation loan

A good credit counsellor can explain all the solutions available to you and identify their advantages or disadvantages. You should feel like you’re in good hands by the end of the conversation. If you don’t, then investigate 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 debt settlement company 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 from above to vet agencies. 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 and ask if you should expect anything different moving forward.

If you’re not happy with the answers, move. If you don’t like your new provider, 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 even better for your budget.

Are you looking to improve your bad credit score or get help with your finances? Speak to a counsellor at Consolidated Credit counsellor to get some free advice and learn more about our services. Call 1-888-294-3130 today.