Credit Consolidation Companies: How to Pick the Right one

Credit consolidation companies are one of the easiest ways to get out of debt, but that doesn’t mean it’s easy to find the right company! It can be difficult to choose the right credit consolidation company that fits your needs, so consider these three things before signing with a credit consolidation company.

Before looking at credit consolidators


It’s important to start by taking a good look at your financial picture as it is right now. Check your credit score and make sure you have all of your credit card, personal loan, and mortgage information on hand. You should be able to get these from each company’s website; if not, call them and ask for copies of your statements. If you don’t understand any aspect of your financial situation or credit history, you may want to find an impartial adviser—for example, a certified public accountant or a fee-only financial planner—to help with deciphering some of it before making any moves.

Comparison shop



Credit consolidation companies can seem similar at first glance, but digging a little deeper will reveal important differences between them. One may offer lower rates on balance transfers, for example, while another has better credit-score requirements or provides more accessible service. Make sure you investigate all available options before picking a particular company. It’s also worth noting that some of these services can have serious downsides as well—credit counselors and debt management agencies aren’t necessarily best suited for everyone.

Figure out what you want from a provider


There are a ton of consolidation companies out there. And, as you’re likely already aware, they all offer different services. Before narrowing down your list of potential providers, take some time to research what each offers. You can do that by reading reviews from people who have used them or by calling and asking customer service representatives directly about what features and benefits their plans offer. That way, you’ll be able to figure out which company is most aligned with your needs.

Compare costs and interest rates


These days, companies offer a wide range of credit-consolidation services. Some consolidate your debt for free and some will charge you thousands of dollars. So it’s important to do your research before choosing one. Look into interest rates and fees, as well as how long you’ll be required to pay off your debt with their service. If there are certain debts you don’t want included in your consolidation plan, make sure that doesn’t happen. The more careful planning you do now, before contacting a credit-consolidation company, the better off you’ll be later on down the road (like when interest rates rise). Credit consolidation is a great option for people who need help paying off their debts—as long as they choose wisely!

Understand all fees


Look for a credit consolidation company that’s willing to break down all fees upfront. An upfront fee can be worth it if it pays for itself over time through lower interest rates, but you want to make sure you know what you’re paying so you don’t get an unpleasant surprise later on. Look at any prepayment penalties and loan-renewal fees, too. Make sure your debt is going away—and not just being rolled into a new loan that could cost more in interest than your original balance.

Learn about your potential new provider


When researching new credit card consolidating agencies, keep in mind that there are many options available. There are three main types of companies from which you can get your debt consolidation services. They include non-profit organizations, non-bank businesses and banks. Each has its own advantages and disadvantages so it’s important to determine which company fits your needs before signing up for their services. Non-profit organizations typically have lower interest rates than other companies but they also may not be as quick at processing your paperwork or receiving payments. Non-bank companies offer greater flexibility when it comes to settling debts but they may charge higher interest rates and fees than banks do.

Be ready for success!


It’s exciting to think about your new debt-free life and know that you will soon be free of late payments, over-the-limit fees, and countless hours on hold with credit card companies. You might want to celebrate your pending freedom with a shopping spree or two. Don’t! You don’t need any more bills or credit cards right now (even if you can get them at 0% interest). You need money—and lots of it. Once you know how much it costs to set up shop in your business, secure rental space, purchase supplies and equipment and hire staff, etc., then start spending.

What if I have bad or no credit?


If you’re struggling with bad credit or have no credit history at all, you might be able to find a company that helps people with bad credit. However, it’s still best to improve your credit before consolidation because lenders may view your past habits as an indication of how responsible you are. In general, make sure every bill is paid on time, and ask creditors if they offer any special options for those who aren’t able to pay their debts immediately. Here are some companies that can help with bad credit

Make sure it’s the right time for you


Many companies offer very similar services with just a few differences. When deciding which credit consolidation company to go with, it’s important not only to compare prices but also services and terms. Make sure you know what type of debt relief you can expect from your choice and be on the lookout for hidden fees as well as any requirements for long-term monthly payments. A good way to tell if a company is reputable is by looking at its BBB rating, so make sure that a company has a rating before you sign up.

Don’t just compare on price—Compare results as well


As you shop around for a credit consolidation company, don’t just focus on price—look at what you can expect to get out of any given service. If an advisor says they can lower your monthly payments but not lower your interest rate, or reduce your total balance but won’t extend your payment term, then it might be wise to hold off on signing with them. Remember, getting out of debt quickly is great and all, but having too much in debt isn’t good either. Find a middle ground that works for you.



So far we have covered two of the most important aspects of starting a business, financing and branding. Credit consolidation is an additional step that you should take before you launch your business. The entire purpose of credit consolidation is to make sure you do not run into any legal trouble while trying to pay off debt. This can help save your business from failing before it even gets started. Follow these tips in order to choose a good credit consolidation company and keep your debt under control while creating a successful business!