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Friday, April 19, 2024

Debt Reduction Services Provides Debt Relief, Housing Counseling, and Educational Resources

Debt Reduction Services Helps Consumers Get Back On Track
Mike Senecal

Written by: Mike Senecal

Mike Senecal
Mike Senecal

Mike Senecal draws on more than 20 years of editorial experience to update CardRates.com readers on industry trends, business news, and best practices in budgeting and credit use. Mike has worked for decades in academic and trade publishing, including roles as managing editor and technical editor at the University of Florida and as contributor to finance industry publications, including Surety Bond Quarterly and Independent Agent, among others. Mike holds bachelor’s and master’s degrees from the University of South Carolina, and he enjoys bringing his years of academic and industry expertise online to help consumers of diverse financial backgrounds.

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Edited by: Lillian Guevara-Castro

Lillian Guevara-Castro
Lillian Guevara-Castro

Lillian Guevara-Castro brings more than 30 years of editing and journalism experience to the CardRates team. She has written and edited for major news organizations, including The Atlanta Journal-Constitution and the New York Times, and she previously served as an adjunct journalism instructor at the University of Florida. Today, Lillian edits all CardRates content for clarity, accuracy, and reader engagement.

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In a Nutshell: There’s no time like the present to start getting out of debt. But consumers need to understand who they’re dealing with when they do a web search and click on a promising link. Debt Reduction Services is a nonprofit credit and housing counseling agency that provides debt consolidation services. Debt consolidation lowers interest rates and monthly minimum payments and stops late and over-limit fees. Debt Reduction Services and its sister brand, Money Fit, also offer financial education to help people of all ages learn how to make the right money moves.

The consequences of financial mistakes can profoundly impact consumers and frustrate their prospects for years. Credit becomes expensive or unavailable. Mortgages, insurance, leases, and even jobs are on the line.

It’s best never to fall into bad financial habits. But nobody’s perfect, and consumers with financial problems scour the internet in droves, looking for a way out.

Unfortunately, the web is a minefield when it comes to financial solutions. If something seems too good to be true, it probably is. Yet that doesn’t deter people from clicking on a link that leads to an unfamiliar business and suffering the consequences.

Debt Reduction Services logo

That’s why consumers need to understand the lay of the land when choosing a company or organization to help them remedy a bad financial situation. Debt Reduction Services (DRS) is a credit and housing counseling agency that offers transparent debt consolidation services to help consumers get back on track.

As a debt consolidation service providing free financial education, DRS differs from debt-settlement services in many ways. Debt settlement services charge a fee to negotiate with creditors to accept a discounted payoff. When it works, settlement can stave off bankruptcy, but it can severely impact credit scores.

An agency negotiates with creditors to accept lower interest rates in debt consolidation, and credit scores are not directly impacted like they are in debt settlement. Working with a debt consolidation service like DRS is a much better deal for consumers who need a predictable monthly payment to resolve debt.

“Creditors will often lower their interest rates to between 2% and 8% when the average rate for consumers with good credit is in the low 20s,” said Todd Christensen, Housing Counseling and Education Manager and an Accredited Financial Counselor® at DRS. “Plus, the consumer knows their monthly payment, making their finances easier to understand.”

Nonprofit Credit Counseling and Debt Management

Debt Reduction Services differs from some debt consolidation services in that it is a highly regulated 501(c)(3) nonprofit licensed to provide debt management and consumer credit counseling services in all 50 states.

A free introductory credit counseling session is always available with no obligation.

The firm earns money from capped client fees and funding from creditors. Creditors prefer working with debt consolidation services like DRS over debt settlement companies because debt consolidation services pay creditors the total amount owed.

Todd Christensen
Todd Christensen, Housing and Education Counselor and Accredited Financial Counselor® at DRS.

“We set the monthly payment and forget it until you’re out of debt in five years or less, with no prepayment penalty,” Christensen said. “There’s no direct effect on your credit score, although there may be indirect consequences because accounts do close.”

DRS provides a debt consolidation calculator to help consumers understand the math. Its nonprofit status eliminates some of the business pressures that for-profit entities face.

“Nonprofit means that no one inside the business can benefit personally from our services,” Christensen said. “And nobody can sell the business — it’s not owned by an individual but operated by a board of directors from the community.”

Nonprofit status also confers a community service commitment to DRS. Christensen, based in southeast Idaho, has service on housing authority program coordinating committees since he started at DRS almost 20 years ago.

The firm is a member of the Jump$tart Coalition for Personal Financial Literacy, which promotes financial literacy and provides financial education in schools.

“We participate in activities and events that make sense for us, not just in Idaho but around the country,” Christensen said. “We lend our knowledge and expertise where it’s needed.”

Financial Education Through Money Fit Helps Students

Nonprofit debt consolidation services like Debt Reduction Services operate under several charter types. DRS does business under an education charter, establishing it as a free community and online education provider in personal finance, budgeting, credit, debt elimination, savings, and other subjects.

“Everything we do is with client education in mind,” Christensen said.

DRS undertakes most of its educational work under a sister brand, Money Fit by DRS. Money Fit helps households and individuals in financial crisis, including students, seniors, and all others who seek trusted educational and counseling programs to fix their finances. As a nationwide nonprofit resource, it guides users in debt reduction, credit building, budgeting, and saving fundamentals.

MoneyFit logo
Money Fit provides financial education as a sister brand of DRS.

A cornerstone of the Money Fit approach is Money Fit Academy, a classroom-style collection of learning resources to help teach students and others how to make sound money choices and build for the future. Christensen said the decision to cast DRS’s educational offerings in the Money Fit brand was strategic.

“Early on, as I was trying to get into high school classes to discuss budgeting, teachers couldn’t get past the DRS name,” Christensen said. “I’d tell them about all these great programs, and they’d say their students didn’t have credit cards yet. It’s much less threatening to people to talk about Money Fit rather than debt reduction.”

Money Fit Academy offers personal finance courses, activity-based progressive exercises, a blog, an archive of podcast episodes, budget calculators, question-and-answer content, and a video library. It can act as an educational hub for businesses and nonprofits. It even offers a scholarship program.

“We’re serious when we say we hope to prevent financial problems,” Christensen said. “That’s why we have programs to help children as young as second grade and some great programs for middle and high school students and adults who lament — as many do — that they wish they had learned these things in school.”

Support for Homeowners, Homebuyers, and Renters

The current homebuying climate of high prices, high interest rates, and low housing inventory prevents many from achieving the dream of homeownership. Furthermore, people with credit struggles pay a price when rental leases are harder to come by. Meanwhile, many others struggle with housing access.

Debt Reduction Services proudly offers nationwide housing counseling services to provide resources and relief in these varying circumstances.

The service provides comprehensive education on financial management and credit building tailored specifically to housing concerns. Counseling services aim to create personalized action plans and provide valuable resources to assist clients in identifying and achieving housing goals.

DRS offers insights and expertise in several areas, including fair housing, financial literacy, homeowner finances, predatory lending, pre-purchase homebuying, rental issues, and reverse mortgages. It can work with first-time homebuyers and people experiencing homelessness.

“Anybody homeless, at risk of homelessness, at risk of eviction, or having rental issues can contact us to learn rights and responsibilities for fair housing,” Christensen said.

The service takes many forms. For example, the team helps prospective homebuyers set realistic goals and establish a path to achieving them. A free credit report review helps homebuyers understand what typically helps when trying to build credit.

DRS connects people who are experiencing or are at risk of experiencing homelessness with local resources to access shelter and state assistance programs to help with the first and last month’s rent.

Housing counseling is one more in a long list of benefits associated with working with DRS as an industry-leading nonprofit debt consolidation and counseling provider. Christensen encourages consumers to call and connect. It’s a great way to overcome the disinformation minefield that is today’s internet.

“My motto is use us — you can’t abuse us,” he said. “Whatever the financial or housing need is, we can generally help.”