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If you have determined that using a debt consolidation company is a good idea for you and your finances, how do you choose one wisely?

Different Types of Debt Consolidation Companies

A debt consolidation company can help you in various ways. The first thing that they will do is take all your existing debts and combine them into one ongoing payment. What happens next is up to you. You might decide on any one or more of the service options they offer. The best thing to do is to get out all your paperwork concerning your debts and look through them carefully. Decide which debts are the most problematic; then see which of the following options would help you the most:

* Lower interest rates - skyrocketing interest rates are one of the biggest problems you can face. A high interest rate can financially stunt your repayments. Talk with your consolidation company and see if they can arrange lower rates for you. If you are able to develop and stick with a repayment plan, your interest rate can be lowered. This will improve your finances instantly.

* A longer repayment term - if you constantly have repayment dates swirling through your head, ask your consolidation company to negotiate a longer term for you. It can take some of the urgency out of your repayments.

* Credit counseling - if you have little or no idea about how to help yourself financially, be honest with yourself and get credit counseling. You will learn insightful ways of dealing with your finances that can last a lifetime.

* Halt the incessant phone calls from creditors - do you dread the phone ringing? If so, ask your consolidation company to speak with your creditors so you can bring some normalcy back into your life. Then you can stop twitching every time the phone rings for fear it will be a nasty call from a creditor. The nasty letters will also cease when you are proactively dealing with your debt sensibly and safely.

* More debt services - once you are debt free (which could take a while), you may be interested in other services your consolidation company offers, such as some of their useful credit repair tips.

* Better credit status - if you follow the advice of your consolidation company you will soon see your credit score in "repair mode." This is very important if you want to become financially stable and credit-worthy once again.

* Financial management - by learning how to deal with your finances you will build reinforcing new habits that keep you from slipping into debt again. It is so easy to find yourself with bills that you can't pay, but if you know how to avoid the situations that get you into such a position in the first place, you are in a very winnable position.

Knowledge is priceless, and if you have the know how, you can become and remain debt free. But to do so, you need at least a cursory understanding of the types of debt consolidation companies - and the services offered - available to you.