If you're struggling to keep up with bills and you feel like you'll never be able to repay your debts without some outside help, there are plenty of companies who will assist you. In fact, entire industries and financial products have been built around helping people consolidate debt or settle for less than they owe. Examples include balance transfer credit cards and debt consolidation loans, as well as debt relief strategies like debt management plans (DMPs) and debt settlement.

Before you reach out to a third-party company for help restructuring or settling your debt, it's always smart to do some research ahead of time. This is partly due to the fact that so many debt relief options exist, but it's also because the debt relief industry is known for its share of scams.

The Federal Trade Commission (FTC) says that, before you move forward with any debt relief company, you should contact your state Attorney General as well as the local consumer protection agency. Either one can inform you of consumer complaints against companies you're considering, as well as licensing requirements that might apply.

Also, never rely on anything you're told directly from a company in a sales pitch. Do your homework ahead of time, and get everything in writing. 

But, how do you know if a debt relief company is reputable and legitimate? This is a question Investopedia staff set out to investigate and answer before we began compiling information for our debt relief reviews. 

To come up with the data for our comprehensive reviews, we compare companies based on the services they provide, their fee structures (if disclosed), their overall transparency, and their reputation with government agencies and private firms that rank them.

In this guide, we'll explain all the factors we compared when reviewing debt relief companies and comparing them to one another. We'll also explain why each factor is important, the rating system we used to compile our internal data, and what consumers should care about the most when choosing a debt relief company.

Debt Relief Methodology

Debt relief is a complex industry since there are many companies offering services in this space, yet they don't all offer the same type of debt relief help. To make sure our evaluation of each company considered was fair and balanced, we chose to break our scoring down into many working parts, which are explained below. 

Within each section of our debt relief methodology, we ranked individual companies based on a scale of 1 (lowest) to 5 (highest). From there, we took the weighted average of all scores and ranked them once again based on the importance of the factor. The percentages we used to compare each category are highlighted below.

Stability 5%
Reputation and Customer Satisfaction 10%
Customer Experience 7%
Services 30%
Costs and Fees 48%

The following sections explain the different information we considered within each factor we rated, as well as why you should consider this information when comparing debt relief companies.

Evaluating Stability

Where some industries like insurance feature companies that have been around for more than a century, debt relief is much newer on the scene. As you begin comparing all your options, you'll even find debt relief companies that have only been in operation for a year or less.

With that in mind, we chose to compare companies based on their stability using the following criteria:

  • Time in business
  • Membership with the American Fair Credit Council (AFCC)

Time in Business

Without a long history of service to research, comparing companies in the debt relief space can be a challenge. That's part of the reason we included the length a company has been in business as a major component in their stability rating. Debt relief companies who have been in existence for even five or 10 years are easier to research and compare, and they have been around long enough to have customer reviews as well as complaints. 

Using the following industry averages, we scored each company’s number of years in business using the following scale:

Excellent (5) 20 or more years in business
Great (4) 15 to 19 years in business
Good (3) 11 to 14 years in business
Fair (2) 6 to 10 years in business
Poor (1) 1 to 5 years in business or not disclosed

American Fair Credit Council Membership

Another factor we considered in this section is membership with the American Fair Credit Council. The AFCC is the premier trade association that is currently "fighting for consumer rights, defending access to debt negotiation services and ensuring the ethical treatment of consumers seeking to resolve their debts through debt settlement." 

Becoming a member of this council means a debt relief company is held to high standards in terms of fairness, legitimacy, and clarity. Likewise, lack of membership could indicate an unwillingness to be held to the highest standards, or even just a short history operating in the debt relief space. Either way, we rated debt relief companies based on this factor using the following scoring system.

Excellent (5) Membership with the AFCC
Poor (1) No membership

Company Reputation and Customer Satisfaction

Within the debt relief industry, a company's reputation says a lot about the quality of its services. Actual customer reviews also play a huge role since they give the best insight into the lived experiences of a debt relief firm's previous customers. 

In order to rate each debt relief company based on their reputation and customer satisfaction, we looked at the following factors:

  • Better Business Bureau (BBB) accreditation 
  • Better Business Bureau reviews
  • Trustpilot reviews

Better Business Bureau Accreditation 

The Better Business Bureau was founded in 1912, so they have been in operation for well over 100 years. During that time, this private organization has created a system for reviewing and comparing individual businesses based on customer reviews and ratings. 

While accreditation with the BBB is definitely a positive attribute, it's important to understand that debt relief firms (and other companies) can pay a fee to become accredited. As a result, it's crucial to take BBB accreditation with a grain of salt. When a company is able to pay for a rating from a private organization, less weight should be given to this particular factor.

We still chose to include BBB accreditation in our debt review methodology, but we gave very little leverage to this ranking. Here's how we scored debt relief companies based on their BBB accreditation.

Excellent (5) Accredited
Poor (1) Not accredited

Better Business Bureau Reviews

While BBB accreditation should be approached with a certain amount of skepticism, we gave more consideration to customer reviews and complaints registered with the BBB. After all, customer feedback on their experience with an individual debt relief company says a lot about how they operate and treat their customers.

When customers leave a review with the BBB, they can rate the company using a star rating system of 1 to 5 with 5 stars being the best. We used our own star rating system to rank debt relief companies based on their reviews:

Excellent (5) 5 stars
Great (4) 4 stars to less than 5 full stars
Good (3) 3 stars to less than 4 full stars
Fair (2) 2 stars to less than 3 full stars
Poor (1) Less than 2 stars or no reviews

Trustpilot Reviews

Trustpilot is a review website that lets consumers review and rank companies based on their personal experiences. Trustpilot also uses a star rating system of 1 to 5, with 5-star ratings being the best. 

Debt relief companies receive a surprising number of reviews and star ratings on Trustpilot, seemingly because most customers appear to be very satisfied (or not satisfied at all) with their experience.

We used the following rating system to give credence to debt relief companies based on their user reviews on this platform. 

Excellent (5)  5 stars
Great (4) 4 stars to less than 5 full stars
Good (3) 3 stars to less than 4 full stars
Fair (2) 2 stars to less than 3 full stars
Poor (1) Less than 2 stars or no reviews

Customer Experience

Debt relief companies tend to conduct most of their business over the phone or online, which can make it difficult to provide an excellent customer experience. With that being said, the best debt relief companies still offer their customers plenty of access and support. 

To help compare companies based on the experience they offer customers, we looked at the following areas:

  • Website usability
  • Online chat feature
  • Mobile app
  • Online resources
  • FAQ page

Website Usability

Since the debt relief industry offers most of its services online or over the phone, the usability of their website is a crucial component of the customer experience. Debt relief firms with useful contact forms, plenty of information, and helpful tools give their customers a chance to learn more about debt relief strategies before moving forward. Likewise, debt relief companies with bare-bones websites make it difficult for consumers to find out what they may be getting into.

Here's how we ranked companies based on the functionality of their online platforms:

Excellent (5) Intuitive design, interactive tools, easy to locate information
Great (4) Well-designed, highly informative but few tools
Good (3) Average design, includes useful information
Fair (2) Design lacking, information is difficult to find
Poor (1) Outdated design, poor experience, missing key information

Online Chat Feature

Some debt relief companies have (or have had) an online chat feature that lets anyone ask questions and get answers about debt relief services they might receive. Having the chance to chat online can make customers feel more comfortable before they call in for a free consultation. 

Here's how we ranked companies based on the functionality of their online chat feature:

Excellent (5) Has online chat
Poor (1) No chat feature

Mobile App

Very few debt relief companies have their own mobile app, yet those who do have a leg up in terms of user experiences. While not everyone wants to use a mobile app to manage their debt relief plan, having the option to use an app is a major plus. After all, debt relief company apps let users keep track of their payments and their debt relief progress using their mobile device. 

Here's how we ranked companies based on its mobile app:

Excellent (5) Has mobile app
Poor (1) No mobile app

Online Resources

Some debt relief companies have more online resources than others, but most should have an outline of the services they offer at a minimum. With that being said, the best companies have information that explains how their services work, as well as online debt payoff tools and other interactive features.

We used the following format to rank companies based on its online resources:

Excellent (5) Free interactive tools, educational materials
Great (4) Free e-books and/or videos
Good (3) Blog with stories and helpful information
Fair (2) Basic information
Poor (1) None

FAQ Page

Debt relief frequently asked questions (FAQ) pages are an excellent resource for consumers who are trying to compare debt relief companies. These pages usually include the most common questions potential clients tend to ask, as well as comprehensive answers. Most FAQ pages also include information on fees and pricing, how long debt relief plans usually last, and what it takes to qualify for a specific program.

We used the following rating system to rank debt relief companies based on the presence of an FAQ page:

Excellent (5) Has FAQ page
Poor (1) No FAQ page

Debt Relief Services

Debt relief is a blanket term used to describe a number of different strategies companies use to help consumers pay down their debts. However, the best debt relief companies tend to offer different strategies and features that lead to relatively high success rates.

As we compared debt relief companies based on services, we ranked them based on whether they offer the following:

  • Debt settlement
  • Debt management plans (DMPs)
  • Free consultation
  • Tax relief
  • Credit counseling
  • Client dashboard

Debt Settlement

Debt settlement is a debt relief strategy that helps consumers settle debt for less than they owe. Instead of making payments toward their debts (including those that are past due), debt settlement asks clients to make payments to a savings account that will be used to settle debts later on. 

By and large, debt settlement is the most popular debt relief method offered by the debt relief industry. However, this strategy does come with some risks, including the potential for a negative impact on your credit score.

We rated debt relief companies on whether they offer debt settlement using the following rating system:

Excellent (5) Debt settlement offered
Poor (1) Debt settlement not offered

Debt Management Plans (DMPs)

Debt management plans (DMPs) are another tool debt relief companies use to help their clients get out of debt. With this type of plan, the debt relief firm will negotiate with your creditors in order to lower your monthly payments and interest rates, as well as any fees you've been charged. From there, you'll make a payment toward your debt management plan (DMP) each month, which is distributed to your creditors on your behalf.

While DMPs may not help you settle your debt balances for less than you owe, they can provide you with a pathway out of debt and they don't cause unnecessary harm to your credit score. 

We rated debt relief companies on whether they offer debt management plans (DMPs) using the following rating system:

Excellent (5) Debt management plans offered
Poor (1) Debt management plans not offered

Free Consultation

Can you call a debt relief company and get your questions answered without any obligation? We believe you should be able to, which is why we rated debt relief companies on this important metric.

When comparing debt relief companies, we used the following ratings based on whether they offer a free, no-obligation meeting or phone call.

Excellent (5) Free consultation offered
Poor (1) Free consultation not offered

Tax Relief

Some debt relief companies offer specialized help with taxes you owe in addition to your unsecured debts. This type of assistance is crucial for consumers who owe back taxes to the Internal Revenue Service (IRS) or their state. 

While debt relief companies cannot make your tax debts go away, they can offer help with planning and strategizing relief in exchange for a flat fee. 

We also rated debt relief companies based on whether they offer specific help with tax debts using the following rating system:

Excellent (5) Tax relief offered
Poor (1) Tax relief not offered

Credit Counseling

The Federal Trade Commission (FTC) reports that reputable credit counseling agencies can help you craft a plan to repay your debts. Most credit counseling agencies are non-profits, and they employ counselors who are certified and trained in all issues regarding budgeting, debt management, and consumer credit scores. 

Although most debt relief companies do not offer credit counseling, we rated agencies with the goal of boosting rankings for those that do use the following rating system.

Excellent (5) Credit counseling offered
Poor (1) Credit counseling not offered

Client Dashboard

In order to provide a comprehensive comparison of debt relief companies, we also needed a way to accurately rank companies that offer a client dashboard online. A huge benefit to consumers, client dashboards let debt relief customers track their debt relief plan, their payments, and their progress in real-time. 

Considering the enormous value of client dashboards, we wanted to rank debt relief companies separately based on this factor. We used the following rating system to do so:

Excellent (5) Client dashboard offered
Poor (1) Client dashboard not offered

Costs and Fees

Before you work with a debt relief company, it's crucial to get all terms of your plan in writing. This includes any upfront fees for your plan, ongoing fees for services rendered, the length of your plan as proposed, and the cancellation policy you'll be subject to.

Interestingly, many debt relief companies do not disclose their fee structures upfront, and they will only do so if you endure a free consultation. Further, companies may or may not offer a money-back guarantee or a transparent cancellation policy.

As a result of these variables, we chose to compare debt relief companies based on the following criteria:

  • Money-back guarantee terms
  • No upfront fees
  • Fee percentage closed
  • Cancellation policy

Money-Back Guarantee Terms

Some debt relief companies advertise a money-back guarantee with clear terms and conditions. However, others do not offer a guarantee of this kind, which could leave potential customers wondering whether they could get their money back or easily exit their plan if it's not working out. 

We rated companies based on their money-back guarantee terms (or lack of them) using the following star ratings:

Excellent (5) Money-back guarantee offered
Poor (1) Money-back guarantee not offered

No Upfront Fees

The Federal Trade Commission notes that the FTC’s Telemarketing Sales Rule prohibits companies that sell debt settlement and other debt relief services on the phone "from charging a fee before they settle or reduce your debt." However, that doesn't stop some less-than-reputable companies from trying.

We believe the lack of upfront fees is an important determinant of the quality of a debt relief company, thus we ranked them based on this factor using the ratings below:

Excellent (5) No upfront fees charged
Poor (1) Fees charged or not disclosed

Fee Percentage Closed

Among companies that offer debt settlement, in particular, the average fee for services typically falls between 15% and 25% of each settlement that is made. However, some debt relief companies do not disclose their fees online, leaving you to call in for a free consultation before you can find out how much they charge.

We wanted to reward companies that disclose their fee range, while also lowering rankings for those who refuse to share their fees. We did so using the following rating system:

Excellent (5)  Less than 15%
Good (4)  15% to 25%
Fair (3)  25% or more
Poor (2)  Not disclosed

Cancellation Policy

Finally, we opted to give preference to programs that let consumers cancel their debt relief plan at any time without fees. Some companies advertise their cancellation policies proudly, whereas others do not list any cancellation policies at all.

As such, our rubric assigned each company a star rating using the system below:

Excellent (5) Cancel at any time without penalties and fees
Poor (1) No option to cancel without fees or not disclosed

Shopping for Debt Relief Companies

The debt relief industry can be tricky because it's difficult to know who to trust. Not only will you find a disproportionate number of scams and shady players in this industry, but the Federal Trade Commission even maintains a list of companies and people who have been banned from offering debt relief services. 

Before you sign up with a third-party company who is offering you help with debt relief, the FTC says you should watch out for companies that do the following at a minimum:

  • Ask for upfront payment
  • Pressure you to make voluntary payments
  • Advertise a "new government program" of any kind
  • Make guarantees about your debts
  • Tell you it can stop collection calls and lawsuits
  • Won't disclose information on the services it provides
  • Try to enroll you in their program without going over your finances or goals

If a debt relief company tries any of these moves, your best bet is to steer clear of them altogether. In the meantime, you can also file a complaint with the FTC.