When choosing the best non-profit debt consolidator, it is best to investigate potential organizations before making a final decision. Validating the organization's non-profit status is a good place to start. It is also important to be sure that using a non-profit debt consolidator will not have a negative impact on the individual's credit report. Comparing the cost between different non-profit debt consolidators can help to determine the lowest cost when consolidating debt.
A thorough investigation should provide adequate information on a non-profit debt consolidator. Investigating the validity of non-profit 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, who must meet specific standards to be certified.
Checking with organizations like the Better Business Bureau (BBB), which operates in the US and Canada, can offer insight into the organization's reputation and reliability among consumers. Organizations like the BBB offer reports on a non-profit debt consolidator's reliability and also disclose any complaints made about the organization through the BBB. Most government offices also offer some type of consumer affairs office that can be quite educational, especially when seeking financial services organizations. They can offer education to consumers, making it easier to spot fraudulent organizations.
Some debt consolidation organizations can actually have a negative impact on a person's credit rating. To ensure that a debt consolidation will not appear on a credit report, individuals should obtain a written statement from the debt consolidator confirming this will not happen. It is also important to be aware that many credit card companies can place an account in collections despite debt-consolidation efforts. This too can negatively impact a credit rating. It is best to negotiate a statement from each bill collector, through the non-profit debt consolidator, that ensures the account will not report negatively to any credit bureau.
Price comparison is important in selecting 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 come to a final dollar amount that represents the service charge. Choosing the service with the lowest service rate will help to lower the payments made overall.