With so much information online regarding debt consolidation, it may be hard to distinguish the valid resources from those that are simply out to promote a product. Several reputable organizations offer reliable information that will help you to launch your research into debt consolidation. By starting out with solid information, you will be armed to make good decisions about what to do with your debt.
Annual Credit Report
The first place to start your debt consolidation process is the Annual Credit Report website. It's important to take a good, hard look at your credit report so that you understand where you stand when approaching lenders for a consolidation loan. Lenders' decisions are based on your creditworthiness, and if you have a low credit score you may not qualify for a consolidation loan, or you may see sky-high interest rates. Through the Annual Credit Report website, you are entitled to a free copy of your credit reports from each of the three credit bureaus -- TransUnion, Experian and Equifax -- each year.
Federal Trade Commission
The Federal Trade Commission offers unbiased advice and information on debt consolidation, and the FTC's website is an excellent place to learn about the benefits and pitfalls of debt consolidation. In particular, the article "Knee Deep in Debt" details the differences between debt elimination by loan, debt management plan and debt negotiation. Reading the information on the FTC website will help you to understand the gravity of taking on a consolidation loan so that you make a solid commitment to paying off your debt.
Bankrate
Bankrate has an extensive article database with information on financial management. The articles are easy to read, even if you have little to no experience with finance information. The Bankrate article "10 debt consolidation myths" by Julie Sturgeon is an excellent resource for anyone considering using debt consolidation. The article explains the differences between debt consolidation and debt negotiation, explains the situations in which debt consolidation is harmful and breaks down the pros and cons of bankruptcy.
National Foundation for Credit Counseling
Those who plan to consolidate through a debt management plan, must be very careful about which credit counseling company they work with. Under a DMP, you pay the credit counseling company and they pay your creditors. However, fraudulent credit counseling companies oftentimes don't pay the creditors on time, causing the debtor's credit score to plummet. Check to see if your credit counseling company is listed as a reputable agency on the website for the National Foundation for Credit Counseling.
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