How To Use Credit Card Consolidation Services

There are several advantages to seeking debt consolidation loans to help you manage your credit debt and get your finances under control. The consolidation company can help you lower your payments into manageable monthly payments with less interest. To obtain the assistance of a debt consolidation company, follow these simple steps.

Choose the Right Company

There are many companies that offer debt relief services, but you should look for a company that is rated with the Better Business Bureau. You should look for positive ratings, such as A or A+ ratings. The company should offer multiple solutions and not try to force you into a one size fits all repayment plan that will not work for you. The company should also offer education services that help you learn to better manage your finances and treat you with respect.

Contact the Company to Speak to a Debt Counselor

Your initial contact with the company may be as simple as filling out an online form and submitting it. You should receive a phone call or free consultation from the company during which time you can go over your debt and determine what kind of solutions might meet your needs. Your debt counselor should be able to answer your questions about options, although they may refer you to a lawyer if you have significant financial issues that are beyond the scope of the debt consolidation team.

Choose Your Option

There are several debt consolidation programs available. In some programs, you can pay off the entire debt so that it does not affect your credit rating. In this program, your debt would be consolidated through the service provider and you would make one payment to them for disbursement.

After making at least three on-time payments, the credit card companies will significantly reduce the balance owed on your account and reduce your interest rate so that more of your payment will be applied to your balance. Other options will allow you to pay less to satisfy the debt, through the negotiation of the debt consolidation company, but may cause unfavorable information to appear on your credit report. If, however, your only other option is bankruptcy, then having debt consolidation information on your credit report is definitely the better choice.

Sign Your Agreement

Once you have chosen a company and determined the best course of action, you will be required to sign an agreement that obligates you to the payment with the debt consolidation company. It is important that you pay each monthly payment on time. You may also be asked to close or give up your credit cards that are included in the arrangement.