- 1). Hire a licensed credit counselor. Most licensed and legally operating credit counseling agencies are members of a national trade association. The American Association of Debt Management Organizations (AADMO) is the largest trade association for the credit counseling and debt management industry.
- 2). Schedule a consultation. Bring your billing statements, credit card agreements and loan contracts so the debt consolidator can review your credit information and provide a quote free of charge. Inquire about service fees before making an upfront payment.
- 3). Compare your new loan against your old loan. Look for lower interest rates and lower monthly payments (over a longer term) for your consolidated loan.
- 4). Request the cancellation or reduction of all penalty fees. Creditors can impose late payment and over-the-limit penalty fees. Inquire about canceling or reducing all or a percentage of these fees to lower the amount of debt bundled into your consolidation loan. Most consolidation programs offer penalty fee reduction services; however, the negotiation process will determine how much is reduced.
- 5). Consider program services to stop harassing phone calls from creditors. Ask how soon the debt consolidation can stop calls and letters from creditors attempting to collect old debts.
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