:max_bytes(150000):strip_icc()/Primary-Image-debt-relief-review-methodology-5116156-3f4e900a2de94103b1c726e6cc9576c5.jpg "How We Review and Rate Debt Relief Companies")
| Criterion | Debt Settlement Services Weight | Credit Counseling Services Weight |
|---|---|---|
| Settlement Fee Transparency | 8.00% | – |
| Settlement Fee Percentage Min | 10.00% | – |
| Settlement Fee Percentage Max | 10.00% | – |
| Settlement Fee Percentage: Initial or Settled Debt | 13.00% | – |
| Debt Management Plan (DMP) Fee Transparency | – | 8.00% |
| DMP Enrollment Fee Min | – | 5.00% |
| DMP Enrollment Fee Max | – | 5.00% |
| DMP Monthly Fee Min | – | 9.50% |
| DMP Monthly Fee Max | – | 9.50% |
| Total | 41.00% | 37.00% |
Settlement Fee Transparency
Fee transparency helps you compare costs while shopping for debt relief, making it a relatively important factor. We looked at whether or not debt settlement companies clearly disclose their fees on their websites, and scored this on a binary scale (1 point for yes and 0 points for no). This criterion had a weight of 8.00% for companies that offer debt settlement and was not weighted and scored for those that don’t. This criterion was not scored for companies that only offer credit counseling because they were not included in our debt settlement comparison and analysis.
Settlement Fee Percentage Minimum
Debt settlement companies charge a fee if they successfully settle a debt. This fee is a percentage of the debt in the program and it is usually a range, such as 15% to 25%. We scored the minimum settlement fee percentage on a continuous scale, with lower fees getting higher scores; the lowest minimum fee (14%) got a score of 1, and the highest minimum fee (25%) got a score of 0. This criterion was given a weight of 10.00% for companies that offer debt settlement and was not weighted and scored for companies that don’t offer debt settlement.
Settlement Fee Percentage Maximum
The maximum settlement fee percentage was also scored on a continuous scale, with lower fees getting higher scores; the lowest maximum fee (23%) got a score of 1, and the highest maximum fee (30%) got a score of 0. This criterion had a weight of 10.00% for those companies that offer debt settlement services and was not weighted and scored for companies that don’t.
If a company had a single fee percentage rather than a range (for example, it charges 20% every time it settles debt), that percentage was used as both the minimum and the maximum fee.
Settlement Fee Percentage: Initial or Settled Debt
Some debt settlement companies charge fees based on the initial amount of debt in the program, while others charge based on the amount of settled debt. This can make a significant difference in the cost of the service because a fee (as a percentage) based on the amount of settled debt will be smaller than the same fee based on the initial amount of debt. Therefore, we gave this factor a relatively large weight of 13.00%. We scored this on a binary scale, with companies that charge based on the settled debt getting the higher score (a score of 1, compared to 0). This factor was only weighted and scored for companies that offer debt settlement because this is not a relevant factor for credit counseling.
Settlement Fees: Other
We researched other fees that may be involved with debt settlement, such as account opening and monthly maintenance fees for savings accounts. This criterion was used as a catch-all and we found that only four companies indicated they charge these extra fees, and only two disclosed specific details, so this factor was not weighted and scored.
Debt Management Plan (DMP) Fee Transparency
Debt management plan fees (through credit counseling agencies) can vary quite a bit, so shopping around could help you save on the enrollment or monthly fee. With many DMPs lasting for four or more years, according to the Federal Trade Commission, a large monthly fee could end up costing a significant amount of money. We researched whether or not credit counseling companies disclose their DMP fees clearly on their websites. We scored this factor on a binary scale, with companies earning 1 point if they disclosed the fee, and 0 points if they did not disclose it. This criterion had a weight of 8.00%. This factor was only weighted and scored for companies that offer debt management plans.
DMP Enrollment Fee Minimum
Credit counseling companies often charge a range of fees to enroll in a debt management plan, such as $0 to $45, and the fee you get may be based on your income. We scored the minimum DMP enrollment fee on a continuous scale, with lower fees getting higher scores; the lowest minimum fee ($0) was given the highest score of 1, and the highest minimum fee ($99) was given a score of 0. This factor was given a weight of 5.00% for companies that offer debt management plans and was not weighted and scored for companies that do not offer DMPs.
DMP Enrollment Fee Maximum
The maximum debt management plan enrollment fee was also scored on a continuous scale, with lower fees getting higher scores; the lowest maximum fee ($35) was given the highest score of 1, while the highest maximum fee ($99) was given a score of 0. This factor was given a weight of 5.00% for companies that offer debt management plans and was not weighted and scored for companies that do not.
DMP Monthly Fee Minimum
Debt management plans typically come with a range of monthly fees, although you may qualify for a fee reduction or waiver. We scored minimum monthly DMP fees on a continuous scale, with lower fees getting higher scores; the lowest minimum fee ($0) was given a score of 1, while the highest minimum fee ($75) was given a score of 0. This criterion was given a weight of 9.50% for companies that offer debt management plans and was not weighted and scored for companies that do not.
DMP Monthly Fee Maximum
The maximum debt management plan monthly fee was also scored on a continuous scale, with lower fees getting higher scores; the lowest maximum fee ($28) was given a score of 1, and the highest maximum fee ($75) was given a score of 0. This criterion was given a weight of 9.50% for companies that offer debt management plans and was not weighted and scored for companies that do not.
Performance-Based Fees
We found that all of the debt settlement companies we researched only charge settlement fees when they successfully settle a debt (a savings account fee may be required, but this is charged by the providing bank, rather than the settlement company). We also found that all debt management plans through credit counseling services are not based on performance, but have enrollment and ongoing fees that are independent of any negotiations. This was an expected outcome, but we checked to ensure that companies abide by industry regulations and to find any unusual payment requirements. Therefore, this factor was not weighted and scored because all debt settlement services are alike and all credit counseling services are alike in those respects.
Cancellation Policy
We found that all of the debt settlement and credit counseling companies we researched allow you to cancel and back out of the service at any time. This was an expected outcome, but we checked for this to ensure that all companies allow clients to cancel without obligation. This factor was not weighted and scored because all companies are alike in this respect.
Money-Back Guarantee
We found that all of the debt settlement companies we researched allow you to get your money out of the account whenever you wish, although any fees for third-party savings accounts are not refundable. On the other hand, the credit counseling services and debt management plans we researched do not offer refunds of enrollment or monthly fees when plans are canceled. This was an expected outcome, but we checked for this to ensure that we understood the payment requirements of each company we researched. This factor was not weighted and scored because all debt settlement services are alike and all credit counseling services are alike in those respects.
Availability
Availability is important because it determines whether or not you can work with a company. There are often some requirements, as well as state and debt limitations, which are worth considering for any company you consider working with to find debt relief. We only weighted state availability and minimum debt required, but we collected data on maximum debt allowed and types of eligible debt as well.
| Criterion | Debt Settlement Services Weight | Credit Counseling Services Weight |
|---|---|---|
| State Availability | 14.50% | 14.50% |
| Minimum Debt Required | 8.00% | 5.00% |
| Total | 22.50% | 19.50% |
State Availability
Only a few debt settlement services we researched were available nationwide, although many are nearly nationwide. Of the credit counseling services we researched, many were available in all 50 states and Washington, D.C. We scored this on a continuous scale, with more available states (and D.C.) getting a higher score; services with the most state availability (50 states and D.C.) were given the highest score of 1, and the service with the least availability (14 states) was given the lowest score of 0. This factor was given a weight of 14.50% for all companies we researched.
Minimum Debt Required
Most of the debt settlement companies we researched require a minimum amount of debt to enroll in a program. Minimum debt requirements were less common among credit counseling services; only seven services had such requirements. This was scored on a continuous scale, with companies that had lower minimum debt requirements earning higher scores; the least strict debt requirement (no debt requirement) was given the highest score of 1, and the highest minimum debt requirement ($10,000) was given a score of 0. This criterion was given a weight of 8.00% for debt settlement services and 5.00% for credit counseling services.
Maximum Debt Allowed
We found that most debt relief companies do not have any maximum debt limitations, although a few have a limit of $100,000. That limit is on the total amount of debt, which can be the sum of multiple accounts with smaller amounts of debt. For example, if the limit is $100,000 and you have two debt accounts of $60,000 each, you could enroll one in the program, but not both. This factor was not weighted and scored because almost all companies are alike in this respect, and the $100,000 limit is not a barrier to most customers.
Types of Eligible Debt
We researched the types of debt each debt relief company will work with. We found that debt settlement services and debt management plans are almost exclusively available for unsecured debt, although counseling services are often available for other kinds of debt (secured debt, federal student loans, etc.). Since most companies were alike in this respect and the exceptions were unclear in how and when those other debts might be dealt with, this catch-all criterion was not weighted and scored.
Reputation and Stability
We researched the following criteria to understand and recommend companies based on their reputation in the debt relief industry, their willingness to educate themselves about debt counseling, and their ability to remain in business over a long period of time. This type of information may tell you whether you can trust the company or not, helping you decide between companies.
| Criterion | Debt Settlement Services Weight | Credit Counseling Services Weight |
|---|---|---|
| Year Established | 4.00% | 3.50% |
| Profit or Nonprofit | 3.50% | 3.50% |
| Number of Accreditations | 8.00% | 8.00% |
| Combined Reputation Rating | 3.50% | 3.50% |
| Total | 19.00% | 18.50% |
Year Established
A company’s age doesn’t necessarily indicate a high-quality or low-quality service, but a longer track record does show that a company has experience and has been able to maintain a successful enough business. We scored this factor on a continuous scale, with older companies scoring higher; the oldest company (founded in 1955) received the highest score of 1, while the youngest company (founded in 2022) received the lowest score of 0. This criterion accounted for 4.00% of the total score for debt settlement services and 3.50% for credit counseling.
Profit or Nonprofit
We looked at whether each company was for-profit or nonprofit. We assumed that nonprofit organizations, in some cases at least, may be less likely to push their debt relief solutions on customers who don’t necessarily need them. We scored this on a binary scale, with nonprofits getting a 1 and for-profits getting a score of 0. This factor was given a weight of 3.50% for all companies in our rubric.
Number of Accreditations
We researched the accreditations of each debt relief company in our rubric and grouped the most important accreditations to make comparisons and scoring more convenient. We collected the following accreditation criteria to create this “number of accreditations” factor:
Companies were compared by the number of these accreditations they had, along with which specific accreditations they had. No company had all of the above accreditations; at most, a few companies had three. This factor was scored on a scale from 0 to 5—the more of the above accreditations a company had, the higher the score; the companies with the most accreditations (3) received a score of 0.6, and the companies with the least (0) received a score of 0. This factor was weighted 8.00% for all companies in our rubric.
Accreditation: BBB
We looked at whether or not debt relief companies were accredited by the Better Business Bureau. Since the BBB only provides accreditation based on general company behavior and interactions with the BBB itself, rather than on debt relief services, this criterion was not weighted and scored.
Accreditation: Other
The organizations above are not the only accrediting bodies in the debt relief industry, so we looked for any other accreditations obtained by the companies we studied. We found a few other organizations, including the Consumer Debt Relief Initiative (CDRI) and the Council on Accreditation (COA). This criterion was not weighted and scored.
Combined Reputation Rating
The “combined reputation rating” scored each company based on its combined Trustpilot and Better Business Bureau customer ratings. This overall rating was found by calculating the combined weighted average of Trustpilot and BBB ratings, using the number of customer reviews as the weights. This allowed us to more accurately compare companies with different numbers of customer reviews across both Trustpilot and BBB—more reviews indicate a higher confidence in the rating.
The “combined reputation rating” was created using the following four criteria:
- Trustpilot customer rating
- Trustpilot customer review number
- BBB customer rating
- BBB customer review number
This factor was scored on a continuous scale and accounted for 3.50% of the overall score for all companies in our rubric; the best combined customer rating (5) was given a score of 1, and the worst rating (0) was given a score of 0.
BBB Rating
The BBB also provides companies with a letter grade from A+ to F. Since nearly all of the companies we researched had an A+ rating (34 out of 40 companies), and since BBB ratings are based on general company behavior and BBB interactions rather than company performance and services, this criterion was not scored.
Number of CFPB Complaints
The Consumer Financial Protection Bureau (CFPB) maintains a consumer complaint database covering financial products and services. We researched complaints for each debt relief company in this database; since we only found two companies with complaints, and since CFPB complaints are highly variable in their severity, this criterion was not scored. This qualitative information is used to inform our company reviews.
Customer Experience
We researched the following criteria to understand the experience of an average customer when contacting each company and using their service.
| Criterion | Debt Settlement Services Weight | Credit Counseling Services Weight |
|---|---|---|
| Program Duration Disclosure | 1.00% | 0.75% |
| Customer Support Accessibility/Methods | 1.50% | 1.25% |
| Live Human Online Chat | 1.00% | 1.00% |
| Website Usability | 1.00% | 1.00% |
| Online Resources | 1.50% | 1.50% |
| Client Dashboard | 2.00% | 2.00% |
| iOS Mobile App | 0.75% | 0.75% |
| Android Mobile App | 0.75% | 0.75% |
| Total | 9.50% | 9.00% |
Program Duration Disclosure
Debt relief programs often take four or more years to complete, according to the FTC. The timeline depends in large part on the amount of debt involved, the customer’s ability to pay, and for debt settlement, the success of settlement negotiations. A company can’t (or shouldn’t) promise that you’ll be debt-free by a certain date. But it is a good sign when a company informs you of the typical debt payoff timeline, which can be longer than you may expect.
We scored this on a binary scale; companies that disclosed average program durations on their websites were given the higher score. This criterion accounted for 1.00% of the total score for debt settlement services and 0.75% for credit counseling companies.
Customer Support Accessibility/Methods
Getting in touch with the company managing your debt is important, and thankfully most of the companies we researched provide several customer support methods; we looked for phone, email, mail, live human chat, and fax accessibility. We scored this criterion on a continuous scale, with more customer support methods getting a higher score; companies with the most customer support methods (5) received the highest score of 1, and companies with the least (2) received a score of 0. This factor was given a weight of 1.50% for debt relief companies and 1.25% for credit counseling services.
Live Human Online Chat
Debt relief services can seem opaque—what exactly do they do? How can they help? Being able to quickly and easily talk to a company representative about its services can help you gain some perspective and awareness of your options.
We scored live human online chat on a binary scale—companies that offered live chat (as opposed to chat with an automated bot, or no chat) scored 1 point, while those without this service scored 0 points. This factor accounted for 1.00% of the total score for all companies in our rubric.
Website Usability
Website usability is somewhat subjective, but we developed a quantitative approach to collect data on and rate website usability based on three factors:
- The amount of educational information provided
- How easy it was to access that information
- How well-designed and modern the website was
Each usability factor was scored on a continuous scale. Individual scores for each of those factors were averaged to give each company an overall website usability score; the highest website usability rating (3) was given a score of 1, and the lowest rating (0.33) was given a score of 0.11. Website usability was given a weight of 1.00% for all companies in our rubric.
Online Resources
Like website usability, we developed a multi-factor score to rate each company’s online educational resources.
We looked for:
- Interactive tools (like calculators)
- Downloadable PDFs
- Videos
- Blog posts and/or articles
- FAQ sections
Each factor was scored on a binary scale of 1 if the company offered it or 0 if it did not, and the scores were averaged to generate the overall online resources score; the companies with the best overall online resources were given a score of 1, and those with the worst received a score of 0. This criterion was given a weight of 1.50% for all companies in our rubric.
Client Dashboard
Debt settlement programs and debt management plans require you to make payments over a long period of time, slowly moving toward your goal. It’s essential to keep track of your progress, but not all companies offer a website-based dashboard to monitor how far you’ve come and how far you have to go. We scored this criterion on a binary scale (1 point for companies offering it, and 0 points for those without it), and a weight of 2.00% for both debt settlement and credit counseling companies, with companies that do offer a dashboard scoring higher.
iOS Mobile App
Some debt relief companies offer mobile apps, making it easier to access their service and customer support from your phone. We scored this on a binary scale (1 point for yes and 0 points for no app) and weighted iOS mobile app availability 0.75% for all companies in our rubric.
Android Mobile App
We scored Android mobile app availability on a binary scale (1 point for yes and 0 points for no app) and weighted it 0.75% for all companies in our rubric.
Services
In addition to their primary services, some debt relief companies offer extra services to help in specific situations, such as foreclosure (housing counseling) or bankruptcy. These services are more common with credit counseling, so they were given more weight when scoring credit counseling services. We collected data on other services, but did not weight and score them, as you will see below. These were credit counseling, free consultation, tax relief counseling, student loan counseling, credit report review services, disaster recovery services, and military support services.
| Criterion | Debt Settlement Services Weight | Credit Counseling Services Weight |
|---|---|---|
| Debt Settlement | – | 5.00% |
| Debt Management Plans | 5.00% | – |
| Additional Service: Debt Consolidation Loans | 3.00% | 3.00% |
| Additional Service: Housing Counseling | – | 4.00% |
| Additional Service: Bankruptcy Counseling | – | 4.00% |
| Total | 8.00% | 16.00% |
Debt Settlement
We looked at whether or not each company offers debt settlement as a debt relief method and used this information to determine which companies to include in our research for our best debt relief article. This was scored on a binary scale, but only for credit counseling companies (since debt settlement companies offer debt settlement). For our credit counseling companies, this criterion was given a weight of 5.00%, as it provides customers with another avenue of debt relief if credit counseling isn’t right for them.
Credit Counseling
We researched whether or not each company offers credit counseling as a debt relief method. However, this question was interpreted in various ways by different companies, with some taking this to mean debt management plans and others taking it to mean their free initial debt consultation. This criterion was not weighted and scored because the “debt management plan” criterion below returned more usable information, and that was used to distinguish between debt settlement and credit counseling companies.
Debt Management Plans
We looked at whether or not companies offer debt management plans through credit counseling (as opposed to debt settlement programs) to determine which companies to include in our research on the best credit counseling services. This was scored on a binary scale (1 point if the company offers it, and 0 if it does not) and was not weighted and scored for credit counseling companies because all credit counseling companies offer it. Instead, we weighted this 5.00% when analyzing our list of companies that offer debt settlement since this is an additional offering for customers of those companies.
Free Consultation
We found that all of the debt relief companies we researched offer free initial consultations. These are crucial to give customers a chance to get to know the company and what it can do before making a commitment. This criterion was not weighted and scored because all companies offered a free consultation.
Additional Service: Debt Consolidation Loan
A debt consolidation loan involves taking out a new loan to pay for multiple other debts, consolidating them and their monthly payments into one. It can reduce your monthly payment if you get a longer loan term, though this will increase the overall cost of the loan; or, if you refinance at a lower interest rate, you can save money on interest charges.
Some debt relief companies (mainly debt settlement companies) offer consolidation loans in addition to their typical service, in partnership with a bank or network of lenders. We scored this on a binary scale (1 point if offered, 0 if not) and weighted it 3.00% for all companies in our rubric.
Additional Service: Housing Counseling
Housing counseling services (provided by HUD-certified counselors) can help if you’re faced with foreclosure, are having trouble buying a home, or need help managing home finances. We found that this service was almost exclusively offered by credit counseling services, and we scored this on a binary scale (1 if offered, 0 if not) and weighted it 4.00%. We did not weight and score this for debt settlement companies.
Additional Service: Bankruptcy Counseling
Bankruptcy can be stressful, so having a trained counselor by your side to help you navigate the experience can be invaluable. Like housing counseling, we found this service to be offered in large part by credit counseling services, rather than debt settlement companies. We scored this on a binary scale (1 if offered, 0 if not) and weighted it 4.00% for credit counseling services. We did not weight and score this for debt settlement companies.
Additional Service: Student Loan Counseling
Federal student loans are not typically eligible for debt settlement or debt management plans, but some companies do offer counseling services for those struggling to pay student loan debt (13 of 40 companies). We did not weight and score this criterion because the scope and quality of those services were unclear from company responses.
Additional Service: Tax Relief Resources
A few debt relief companies offer some type of plan or counseling for help with overwhelming tax debt, but not many. This criterion was not weighted and scored because most companies do not offer any services for tax debt relief, and those that do vary in the scope and availability of the service.
Additional Service: Credit Report Review
We looked into whether or not debt relief companies offer dedicated, ongoing credit report review services. However, we found this criterion (like “credit counseling”) was often confused with the free initial consultation and few if any companies seem to actually offer it, so this criterion was not weighted and scored.
Additional Service: Disaster Recovery
Some people get into debt due to unavoidable disasters. However, there are usually no specific debt relief services available to cover such circumstances. We asked debt relief companies if they offer any services that are exclusive to victims of disasters, but they do not—the debt relief services they offer do not usually depend on the circumstances that resulted in the debt. This criterion was not weighted and scored because all companies were alike in this respect.
Additional Service: Military Member Support
A few debt relief companies we researched offer dedicated support for military members, like waived debt management plan fees, but this was rare. This criterion was not weighted and scored because most companies do not offer this service and, of those 12 that do, the scope and quality of the service were unclear.
Articles That Use Our Methodology
We have many articles about debt relief, credit counseling, and more to meet your needs. The data collected in this project have been used to compile the following debt relief recommendations and educational guides:
Meet the Team
Sana Siddiqui
Research Analyst, Financial Product Reviews
Sana is a research analyst with Investopedia’s financial product reviews team. She focuses on financial products and services through direct research and by evaluating consumer surveys and interviews. Her experience in lending and underwriting gives her broad insight into financial industry business practices. Prior to joining the team, Sana worked in loan originations and processing before pivoting back to a reporting and analytics role focused on competitive analysis and market share reporting for various financial institutes. This experience has given Sana broad insight into financial products and services and the ability to “tell the story” behind the data and convey it to stakeholders—and readers—in a meaningful way.
Brendan Harkness
Senior Editor, Financial Product Reviews
Brendan Harkness is a senior editor of financial product reviews at Investopedia and The Balance. He has spent almost a decade researching, writing, and editing content for financial and business publications about credit, banking, and credit cards.