When choosing a nonprofit debt consolidator, research their nonprofit status, reputation, and impact on credit rating. Obtain written statements to ensure no negative impact on credit report and compare service charges to find the lowest cost.
When choosing the best nonprofit debt consolidator, it’s best to research potential organizations before making a final decision. Validating the organization’s nonprofit status is a good place to start. It is also important to make sure that using a nonprofit debt consolidator will not have a negative impact on an individual’s credit report. Comparing the cost between different nonprofit debt consolidators can help determine the lowest cost when consolidating debt.
Thorough research should provide adequate information on a nonprofit debt consolidator. Inquiry into the validity of nonprofit status can be done simply by asking to see a 501(c)(3) certificate. This is a certificate that the government tax office issues to non-profit organizations, which must meet specific standards to be certified.
Checking with organizations such as the Better Business Bureau (BBB), which operates in the US and Canada, can offer insight into the organization’s reputation and trustworthiness among consumers. Organizations like the BBB provide reports on the reliability of a nonprofit debt consolidator and also report any complaints made about the organization through the BBB. Most government offices also offer some type of consumer affairs bureau which can be quite educational, especially when looking for financial services organizations. They can offer education to consumers, making it easier to spot fraudulent organizations.
Some debt consolidation organizations can have a negative impact on a person’s credit rating. To ensure that debt consolidation does not show up on a credit report, individuals must obtain a written statement from the debt consolidator confirming that this will not happen. It is also important to note that many credit card companies may place an account in collections despite debt consolidation efforts. This can also negatively affect a credit rating. It is best to negotiate a statement from each bill collector, through the nonprofit debt consolidator, that guarantees that the account will not report badly to any credit bureau.
Price comparison is important to select the best consolidator. Some debt consolidation services charge a percentage of the total monthly payment. Others simply charge a flat fee each month. To accurately compare service charges, it is important to calculate the percentage and arrive at a final dollar amount that represents the service charge. Choosing the service with the lowest service fee will help reduce the payments made overall.
Smart Asset.
Protect your devices with Threat Protection by NordVPN
