Despite having a less that honest reputation, there are some legitimate consumer debt relief programs available. Here are some guidelines on choosing a good one.

Your first step in selecting a consumer debt relief program is to look for one that has been recommended by a friend, colleague, or another reliable source.

Make a list of three or four debt relief companies that offer benefits that relate to your situation. Consider both debt consolidation companies that do credit counseling and debt settlement companies.

For information on which path is right for you, look at your debt relief options here.

Check the Better Business Bureau

The next step is to research those debt relief companies with the Better Business Bureau. What you want to look for are several unresolved complaints against the company.

There will undoubtedly be complaints but resolutions are reported to the BBB from both sides of the complaint. Unresolved complaints are the ones that the company did not satisfy. If there are a large portion of unresolved complaints, it’s a big red flag.

Be sure to check out our Debt Settlement Company Reviews for BBB ratings

How do They Pay Your Creditors?

Many debt management companies tell you to stop paying your credit card bills. Depending on you situation, this may be OK, but be aware that the debt relief company my not start paying your bills right away.

This is by design so they can negotiate a lower interest rate or settlement for you. What happens is that your payments go into arrears and is reported negatively to the credit bureaus.

Ask for a schedule of the payments they will make on your behalf. This way you will have the plan documented on paper. Any company that will not provide this is a danger to your credit score.

Are They Non-Profit?

Some debt relief companies advertise that they operate as a non-profit. While this might be true, they could use that as a way to explain extraordinarily high fees.

This is a shady practice and could indicate how they might treat you in the future, so be careful. There are other for-profit organizations that will help you for a reasonable fee.

Are they Open and Transparent?

A debt relief company should be willing and able to provide you with details on how your money will be used. Who gets paid, when they get paid and how much they will be paid should be readily available on request.

After all, it is your money and if the company you choose won’t or can’t disclose this information, take your business elsewhere.

Get it in Writing

A written contract should be offered as well. Every reputable debt management company will supply the details of the program in writing. If a written explanation of terms is not offered, ask for one. If the terms are not favorable, take your money and move on.

Never make any sort of verbal commitment based on a simple phone conversation. Get it in writing every time.

Do They Claim That They Can Clean up Your Credit?

One of the biggest indicators for you to leave the table is when a company promises to remove negative items from your credit report.

No debt management company or administrator of a consumer debt relief program has the authority to do this. Empty promises are a sure sign that you need to take your money, your business and your credit history to another debt relief company.

So to be sure you find the right debt relief agency, do a little homework and research. It could save you a whole bunch of money and safeguard your credit history and report.

The most important of these is your credit report and you need to protect that as much as possible.