Freedom Debt Relief vs. Accredited Debt Relief: Compare Services, Fees, and More (2024)

FAQs

What is the downside of Freedom Debt Relief? ›

How Will Freedom Debt Relief Affect My Credit? Debt relief can negatively impact credit scores. That's because creditors typically won't negotiate with you or a third party until you miss payments. Payment history heavily influences credit scores, however, so late or missed payments can cause your score to drop.

Freedom Debt Relief charges a fee typically ranging from 15% to 25% of the total debt in the program, with an average fee of 21.5%.

I recommend National Debt Relief ² because it has wider state coverage and higher customer service ratings than Freedom Debt Relief. That said, both companies could help you resolve unmanageable debt by negotiating an agreement with your creditors, so you might prefer Freedom Debt Relief if its fee is lower.

Accredited Debt Relief is a legitimate business with an A+ rating from the Better Business Bureau. It claims to have helped over 300,000 clients repay more than $1 billion since its founding in 2011.

Paying off your debt in this way might seem more important, but the damage to your credit score can last for years. Settled debts also stay on your credit report for up to seven years and impact your future access to credit.

Debt settlement cons

Debt settlement companies can charge fees. The creditor may require you to close the account, which will result in losing access to that credit line. The amount of forgiven debt may be considered taxable income by the IRS, so there may be tax implications.

If you're one of the millions of Americans struggling to repay high-interest debt, a debt relief plan may be an option to help you get your finances on track. But it's not a quick fix. It's a long-term solution designed to help you get out of debt over a period of time — typically several years.

The better option for you depends on your financial situation. If you can make your minimum payments each month, but don't see a way out of debt anytime soon, debt consolidation will likely be fitting. If you're struggling to make your minimum payments, debt settlement may be your better option.

Freedom Debt Relief is a legitimate company. It is BBB-accredited and is rated A+. It is also a member of the American Association of Debt Resolution (AADR) and is certified by the International Association of Professional Debt Arbitrators (IAPDA).

What is the best debt consolidation company? ›

Yes, you may withdraw from your Dedicated Account, which you control, at any time. This is an FDIC-insured account, and you control it, not Freedom Debt Relief, meaning you can withdraw from it at any time.

If it successfully settles a debt, Accredited Debt Relief charges a fee of 15% to 25% of the amount of settled debt. However, it says it usually charges 25%. You'll also be charged these fees for the associated savings account: One-time account setup fee: $9.95.

Debt Settlement Impact on Credit Score

While not as devastating as a bankruptcy, debt settlement will have a negative impact on your credit score if you work directly with your creditors, as the settlement may be reported by the creditor to each of the three leading credit bureaus.

Accredited Debt Relief is a good option if you need to clear your debt quickly: It boasts clients who complete their payment program can be debt-free in as few as 12 months, half as long as some competitors.

Without debt, you could miss investment opportunities and limit your access to credit-building experiences. Whatever choice you make, it's important to understand the difference between good and bad debt: Good debt is backed by assets that can increase in value or generate income over time.