Debt reduction services are frequently advertised to help people with financial troubles. But are these services to reduce debt really helpful or are they only interested in helping themselves? The answer, as you might expect, is a little of both. They can be a useful tool for your financial situation, or they can put you further in debt.

Say you are considering using the services of one of these companies. As with anything, you will want to research the company. Just because the company is run as a non-profit organization doesn’t mean they are trustworthy. What in particular should you look for?

Fees are important to take note of. They can be disguised as “required contributions”. Read any written agreement carefully – it should describe the services they are to perform, payment term for said services, how long it will take to achieve results, guarantees, etc. Know what you are signing up for. You will also want to verify that your creditors are willing to work with the agency you choose.

Any company that claims they can instantly repair your credit score is a scam. Maybe they do this  by creating a new, false identity for you. In any case, it’s illegal. Rebuilding your credit is a long-term process. If it sounds too good to be true, it probably is.

Any company that requires you to pay money to get a loan should also be avoided. Advance fee loan scams are illegal – the FTC requires that no one can require a payment until you actually receive a loan or credit. Be wary of debt consolidation loans – don’t be quick to give away your credit card, bank account, social security number, etc.

Finally, one of the best ways to protect yourself from being scammed: check the company’s standing with your state attorney general and the Better Business Bureau. Find out how long they have been in business and their reputation. Using a company that is a member of the National Foundation for Credit Counseling (NFCC) is also a good idea.