There are two maxims that we have been trained to regard as true, the first of which is if it sounds too good to be true, it probably is, and the second is we don’t get something for nothing. Many people are skeptical of free debt consolidation services and they should be.

When choosing a free debt consolidation service, people need to be mindful of the company that they are using. Making sure that the company is BBB certified and legitimate. The Internet is a free for all, and free debt consolidation services are probably not for real. Even the nonprofit debt consolidation companies charge people a monthly fee to help them consolidate debt and pay off their balances.

Red flags to look for when interviewing companies are those who ask for social security numbers and the account numbers for the credit cards right up front. There is much at risk when talking with these companies, and to be absolutely sure that the company is legitimate, the best thing to do is check with the BBB for verification. When people start looking at debt consolidation, they are already experiencing financial difficulties, and dealing with shady companies will just make it worse.

Other warning signs are companies that claim they can consolidate your debt, fix your credit report, or help you settle debt, along with the debt consolidation. Many times these people are barely operating on the right side of the law, and are looking for ways to take your money without being able to promise you legitimate results. Consumers need to use caution when trusting their money and financial future to outsiders.

Hector Milla runs the Best Debt Consolidation Service website – where you can see his best rated debt consolidation company recommendation – and the Best Debt Management resources center.

Find free online debt consolidation tips and bad credit debt management advise respectively. Visit for further information.

Debt Consolidation FAQ:

Question: Debt consolidation should I consider it or not?
So what is the “truth” on them? Are they good or would it hurt you more to go to a debt consolidator. I’m current on all accounts but have sadly gotten myself into a bit too much debt with credit cards. Should I consider one of these things and who is reliable?

Answer: Debt consolidation can be a great form of debt relief to start tackling your debt – whether it’s just lowering your rates, getting a better loan, or cutting your payments to get debt free faster. It is important that you know what your options are and what your goals are before choosing a debt consolidation program or company.
Debt consolidation services can help you consolidate your varying debt into one manageable payment and even establish a payment schedule for you and your creditors. It is better you seek help from any reputed debt relief company to choose the right debt consolidation option matching your financial health.

Question: Which way is better, as far as improving my credit? Debt consolidation or credit repair?
I’m trying to improve my credit score and have come across these two options. I would like to know which of these two options is fast and reliable?

Answer: Paying what you owe, not using credit, and saving to pay cash for things is the best way to repair credit. Anything else is simply moving debt, not improving credit.

Question: Is it possible to refinance a home 2 months after bought it for a debt consolidation new loan?

Answer: Unless there is a condition in your mortgage stating otherwise, yes you can refinance at any time you choose. Be careful that there could be early exit fees applicable if you do. Just check out what is available, and what fees and charges will apply should you refinance. If it will save you money then do it. You may find that you are better staying with what you already have for a year or two.

Question: Can anyone recommend a good debt consolidation or settlement company? I don’t trust any of them.
I have been trying to research help with debt consolidation, but haven’t had any luck.

Answer: You don’t need to incur the extra expense of hiring a debt management/consolidation company to settle your delinquent accounts. Your creditors will not make any concessions to them, in fact they would much rather work directly with you. You are much better off using your money to pay off your accounts than to pay someone else to do it for you.

Question: I need to know in someones opinion the best comp for debt consolidation? I need to get a single monthly bill.
Should I go in person or due it over the phone? I’ve heard some companies are scams and others are more devious to your credit score. Also, how bad does it effect your credit? How many years does it stay on?

Answer: Contact each credit card company that you owe now. Ask them to work with you. Ask each for the lowest credit rate, and ask for the lowest payment. Ask each to work with you as you are trying to consolidate your debt. Some may immediately offer you a debt consolidation loan.

After you get all of your payments lowered (and you can do this by talking to enough supervisors), then check with your local bank or credit union where you have your checking account. Ask them to help look at your bills and see if it’s in your best interest to obtain a debt consolidation loan from them directly.

Don’t be so fast to get a debt consolidation loan as they may have terms and conditions that you are not ready to meet. They also could have tons of interest and closing charges.

Question: How can I get a debt consolidation loan when I am buying my house on a Land Contract?

Answer: Wonder if you mean, “A Contract for Deed”.
You really do not have a debt on the land in that case. You do not own it, and will not until it is paid in full. This is a little like layaway. You may pay “on it” for a time, but it will not be yours until paid. If this is the case, I don’t think the balance of the “land contract” would qualify for consolidation. A lender would really be financing the balance of the contract. If it has a market value above the balance, you may get a lender to do that, and consolidate, depending on the value, which fulfills security requirements.

Question: Debt Consolidation for a Car and Motorcycle?
Is it possible to pay off these two things and roll the payments into one?

Answer: Maybe. Call your bank or credit union. They probably prefer to have one title for each loan though. Simplifies the repo process if you do default.

Question: Debt settlement or Debt consolidation, which is better for your overall credit?
I’m in a lot of debt and I have been looking for some help just to control everything and get one monthly payment. My credit is already crappy but I would like to save as much as possible and I’ve heard bad things about both the settlement and consolidation.

Answer: Neither, they are just two names for the same thing. Please do not consolidate. It is not free, they will lower your payments by increasing the length of time until you are debt free, and you will take a hit on your credit score. Or they negotiate your debt down after telling you not to pay for awhile adding another hit to your credit score.

Another option is entering a Debt Management Plan (DMP) with a non-profit credit counselor like CCCS (Consumer Credit Counseling Services). Contact your local Red Cross for a referral. They can negotiate lower payments and interest rates. They do not negotiate settlements.