If you’re in debt, you may have received an offer in the mail from this company, DebtHunch. Perhaps you’ve even Googled them and weren’t able to find much about them. But one look at the DebtHunch website and you’ll see that they make quite the bold claim: “The smartest way to pay off your debt.”
Plus, $0 down, 0% interest, lower payments, and $1,000’s saved; what’s not enticing about this product?
In this post, we’ll be taking a look at what exactly this company can do for your debt, and if it’s a good fit for you.
What is DebtHunch?
DebtHunch is branded as a debt consolidation solution. They’ll make you offers to help reduce payments and your overall debt without affecting your credit score. At least that’s what they state they’ll do. At first glance, it’s not super clear what they’re offering. Is it debt consolidation? Debt settlement? Is it a loan? Before we jump into all that, perhaps it’ll be useful to clarify the difference between debt consolidation and debt settlement…
What’s the difference between debt consolidation and debt settlement?
These are both two ways of tackling debt, but they differ in their approach.
Debt consolidation aims to combine all your loans into a single loan with a single interest rate. It simplifies payments for you and can help you save some money if you’re able to work in a better interest rate than your combined interest rates from your previous loans.
Debt settlement, on the other hand, is more of a negotiation with creditors where the both of you agree on an amount that’s less than what the actual debt is. Creditors don’t always work with you on this, but if they do, it’ll be because it gives them a better chance to get the max amount out of you as opposed to you not paying them at all and just filing for bankruptcy, if allowed.
How does DebtHunch work?
DebtHunch helps you on the consolidation side of things, as they claim. However, they aren’t a true debt consolidation company. By that, I mean that DebtHunch simply takes you information and pairs you with a bunch of debt consolidation companies that potentially suit you.
In essence, they are a lead generation company. Like when you’re on a website and the website wants you to sign up for their email list? That’s lead generation. And getting you to get in contact with one of the many debt consolidation companies they pair you up with is considered a success in the marketing world.
However, you may be bombarded with more company offers than you bargained for. And that’s to be expected since DebtHunch basically serves as the middleman and relays your information to a bunch of companies who want your business. And the more companies they sell your information to, the more money they make.
Why consolidate debt with DebtHunch?
Now that you know how DebtHunch works, you’ll know that you aren’t really consolidating any of your debt with DebtHunch per se. One reason why you might go with DebtHunch is to see what companies are out there and what they can offer you. However, this may be more of a shotgun approach and whether you like that or not is up to you.
Does DebtHunch hurt your credit score?
DebtHunch will lead you to debt consolidation companies who can potentially offer you a loan. In order to give you a debt consolidation loan, they’ll need to perform a credit check upon application, and this results in a hard inquiry. Hard inquiries do affect your credit score, usually to the tune of about 10 points lower, but it is temporary and will last for one year max.
How can you consolidate debt without hurting your credit?
It’s not easy to consolidate debt without hurting your credit score. In addition to the hard inquiry that’s required upon application for a debt consolidation loan, you’ll also be closing accounts as part of the process of consolidating your debt should you get approved for the debt consolidation loan.
What does a closed account do? It lowers your credit score, due to the fact that you are lowering the average age of the accounts in your credit history. This makes up 15% of your credit score profile, believe it or not. However, it can be worth it, as your payment history makes up a larger 35% of your overall credit score profile, and can be vastly improved with the new debt consolidation arrangement.
How much does DebtHunch cost?
DebtHunch is free, and truly free on your end. But you know what they say… if you’re not paying for the product, you are the product. In this case, it’s true. Your information is what makes DebtHunch money, and the more companies they sell your information to, the more they make.
Is DebtHunch legit/safe to use?
As far as whether DebtHunch is legit is debatable. They don’t hurt the consumer, and they technically do what they claim. However, they are a bit misleading in the sense that you feel you’re working directly with them to consolidate your loan in the best way possible, when really, all they’re doing is selling your information and passing you on to other companies that can do it for them instead.
Is it safe? Again, it doesn’t hurt you, so sure, I believe it is as safe as can be. Obviously, there is the inherent risk of your sensitive information being out there and potentially being mishandled by one or more of the companies receiving your information. However, debt consolidation companies are required to be licensed and thus must abide by a standard of conduct when handling your personal information.
DebtHunch collective online reviews
This is where it gets a bit shady. They’ve got a ton of positive reviews on Google and Trustpilot. But they only have 4 on the BBB website. Granted, the 4 on BBB are positive too. But DebtHunch seems to have paid some people to write glowing reviews for them. You’ll see that certain people have written reviews for the same few companies on the same day. For example, Person A wrote great reviews for random companies 1, 2, and 3. Another Person B also wrote great reviews, and also for those exact random companies 1, 2, and 3, despite the companies not being even within the same industry. Proof? Not ironclad, but it is quite suspect.
However, these things don’t really prove that DebtHunch is neither a good or bad company in its own right. It just shows that they really are a marketing and lead generation company at minimum doing what any marketing and lead generation company would probably do.
Is DebtHunch worth it?
Perhaps. I don’t necessarily feel the need to recommend them as a stellar, above-average company that gets you great results. Because they may or may not be a great fit for you.
No matter your decision on this, the best way to settle on a debt consolidation solution is to do your research. Even if you get offers through DebtHunch’s partners, you still have to do your due diligence on each of those partners individually.