What Is Consumer Credit Counseling? One Option To Get Out of Debt

Consumer Credit Counseling is a service provided by locally based non profit agencies that is designed to help you if you are financially strapped and distressed. While working with a consumer credit counseling service agency – CCCS, you may receive budget counseling, housing counseling, debt management training, and money management training. Additionally, as you work your way through a CCCS program you will be debt free if you stick with the program as it is designed.
Consumer credit counseling is a process that non profit companies called Consumer Credit Counseling Services perform to get you out of debt.
CCCS companies work with your current creditors to get them paid off over time. In most situations, you must have pretty good credit with most of your credit accounts still in good standing in order to get accepted into a consumer credit counseling program. If your accounts are not in good standing or have gone to collections you will need to look at other options to get out of debt.

How Does Consumer Credit Counseling Work?

When you enroll into a consumer credit counseling program, your consumer credit counselor will analyze your total amount that you owe, your total monthly payments, and your monthly income. From this information they figure out a monthly payment schedule that you can afford to pay. While the payment is something you can afford, it is also designed to make sure that your debt is paid off over a 3-5 year time frame. The debt that consumer credit counseling works with is credit cards, personal loans, car loans, etc. You will make monthly payments to the credit counseling company and they will pay your creditors based on the payments that they get each creditor to accept on your behalf.

What Do Consumer Credit Counselors Do?

Consumer credit counselors negotiate with your creditors for reduced interest rates and fees while you are in a credit counseling program. Credit counselors may even get the total amount that you owe reduced, although this isn’t their primary function. Your job is to make your payments to the credit counseling company and their job is to make your payments and do the negotiating with your creditors. Stay out of negotiating.

Often, your credit can remain in relatively good standing as long as you keep making payments to the credit counseling company and they keep making payments to your creditors. It is a very bad idea to miss a payment as the creditors will jack your interest rates and hit you with fees for even just one monthly payment. It is possible that if you miss even one payment your creditors may cease to work with you any longer so take your participation in a CCCS program seriously.