- 1). Look for reputable referrers, such as local financial institutions. Local consumer credit counseling organizations offer free and/or low-cost credit counseling and can also refer you to a reputable debt consolidator.
- 2). Verify the company's credentials. Contact your state's attorney general's office as well as the Better Business Bureau to check on the debt consolidator's credentials and reputation. Ask for records of any consumer complaints against the company. If its credit counselors are certified, verify their individual credentials as well.
- 3). Check your state's licensing requirements. Some states---including Georgia, New Mexico, and Mississippi---prohibit the operation of for-profit debt counseling companies. An unlicensed company that attempts to solicit you directly is operating illegally and should be avoided.
- 4). Ask for a free consultation. A reputable debt consolidator should offer you a free consultation in which a credit counselor assesses your individual financial situation and offers a solution tailored to your needs. Approach any company that demands a fee for this service with caution.
- 5). Understand the company's fees and services. Debt consolidators can be either for-profit or nonprofit, but a nonprofit may still charge some sort of a fee, such as a service fee. Ask to see a written explanation of the fees the company charges as well as the types of services it provides for the related cost.
- 6). Ask about additional services and alternatives. A reputable debt consolidator should offer budgeting and credit counseling services as part of its service package. The company should also be able to offer alternatives to consolidation if, after assessing your situation, it deems consolidation isn't the best solution for you.
- 7). Get it in writing. Any reputable debt consolidator should provide you with a written summary of its proposal for services. This proposal should detail the plan for consolidating your debt, the interest rate, the monthly payment and the number of payments.