Review of Consolidated Credit Counseling Services

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READER QUESTION

Is Consolidated Credit Counseling Services a scam or a good company?

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Bills.com Resident Expert
Dec 12, 2011
HIGHLIGHTS
  • Review the history of Consolidated Credit Counseling Services.
  • Understand that many credit counseling services receive compensation from the credit card companies.
  • Make sure to consider all your debt relief options, before you select the debt relief solution that is right for you.
BILL'S ANSWER

I do not have any direct experience with Consolidated Credit Counseling Services, and am basing the following observations on the information I can find on the company's Web site, the Better Business Bureau, and other public information sources.

Consolidated Credit Counseling Services is a credit card counseling service company. It also offers counseling for homeowners in distress with their HUD mortgages, or are interested in a federal reverse mortgage. According to the BBB, the Ft. Lauderdale, FL company was founded in 1993, and joined the southeastern Florida BBB in 1998. It is a member of the Association of Independent Consumer Credit Counseling Agencies, a trade organization seeking to promote "quality and consistent delivery of credit counseling services."

Consolidated Credit Counseling Services and Debt Management Plan

Regarding its debt services, Consolidated Credit Counseling Services offers a debt management plan (DMP). In a DMP, the consumer sends money each month to the credit counseling organization, which uses the funds to pay unsecured debts, including credit card bills, unsecured loans, and medical bills, according to a payment schedule Consolidated Credit Counseling Services arranges with the consumer's creditors.

Most credit counseling firms will be able to lower a consumer's monthly payments by getting interest rate concessions from lenders or creditors. Although this is unclear on Consolidated Credit Counseling Services' Web site, it is important to understand that in DMP the consumer is still repaying 100% of the debts -- but generally with lower monthly payments. On average, most credit counseling programs take around five years to complete.

The fee for Consolidated Credit Counseling Services' varies and ranges from $10 to $15 per account per month. With most DMP plans part of the cost is underwritten by the banks that issue credit cards in a system of payments to credit counseling companies called "fair share."

While it may seem strange that banks would pay credit counseling companies, remember that DMP programs help the banks’ bottom line by allowing some financially stressed consumers to continue making payments on a regular basis while steering them away from bankruptcy. Historically, the typical “fair share” percentage was around 15%, meaning that credit counselors received 15% of all money they paid to creditors on behalf of their customers. However, this average fair share has dropped to around 6% in recent years, as many banks have reduced their fair share payments, and some have stopped them altogether.

Some financial experts see the counselors’ reliance on “fair share” as a conflict of interest between the credit counselors’ obligations to their consumer clients and their need to please credit card lenders, which provide the majority of many agencies’ revenue. Although the use of “fair share” is nearly ubiquitous among credit counseling agencies, its continued use has led to sharp criticisms of the credit counseling industry.

Other Debt Resolution Options

Because the payments required under a DMP are often as much as or more than the minimum payments on the same debt, credit counseling is best suited for consumers who can afford their minimum payments and who are looking for a faster way by their high-interest credit card debts.  Learn about your options when it comes to how to consolidate debt at our free page and debt portal here:  consolidate debt info.

If the consumer is distressed and cannot afford the minimum payments, the consumer should consider other options -- debt settlement, a debt consolidation loan, or bankruptcy. To learn more about the choices available, see What are my debt resolution options? and Reputable Debt Settlement.

I hope this information helps you Find. Learn & Save.

Best,

Bill

bills.com

VIDEO: Credit Counseling - What is Credit Counseling?

Comments (16)


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Claudine G.
El Paso, TX  |  July 17, 2011
I have been with consolidated credit counseling company for about three years and I have never had a problem. My debts are looking a lot better and I can see light at the end of the tunnel.
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Logan G.
Blaine, MN  |  July 14, 2011
I have 27k in school loans (4 loans of which two are state and two are private). I've used up my deferment and forbearance options for both. They won't work with me on payments and I can't afford the minimum as I am only making about 1400 dollars a month right now. In addition to that debt; during school I ran up my credit card debt to about 4k (two cards). Can i get all that debt consolidated? It is now 3 years since graduating. I live on a very tight budget and I haven't added any debt since that time. But I have struggled to keep afloat. Monthly I pay $350 rent+$180 car payment+$400 school loans+$90 credit cards+$60 groceries+ $100 car insurance+$80 gas to work and home.. after all that is paid I am left with about 40 to 140 dollars for the month in case of emergencies or the RARE opportunity that I do anything fun. advise would be nice because I keep coming up short. Is consolidating my school loans and credit card debt a good option. Lots of times I'm behind on one because I simply have a hard time keeping track of when things are due...
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Bills.com
July 15, 2011
Logan, it is likely not much comfort to know that many people are in the same situation you are in. I commend you for doing everything you can to live within a tight budget and for looking for possible ways to improve your position.

I don't know if you mean federal loans when you say 'state.' You should look into consolidating your student loans. Federal student loans are much easier to consolidate than consolidating private ones. Speak to the Department of Education about your student loans, if they are federal. If they are state, see if your state offers a consolidation program. There is a link in the article I linked to above where you can reach a company that consolidates private student loans.

There are ways to keep better track of when your bills are due. Look into no-cost help, such as Mint.com or set up automatic payments from your bank account, so you can avoid late fees and penalties.

Lastly, if your interest rates are high, you should see if a credit counseling program can help you. Take into account any fees that you the credit counseling program charges, when determining if it will speed up the time it takes to get out debt.
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Thomas G.
Carmel, CA  |  June 18, 2011
So what Consolidated Credit does is to just lower my interest rates? How do i find someone that will agree to lower my debt that i owe? I cannot afford anywhere near my debt payment obligations, and need debt relief and not simply interest rates a little lower.
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Bills.com
June 20, 2011
Complete the Bills.com debt relief form to receive a no-cost, no-obligation, no-gimmick quote from a pre-screened Bills.com debt resolution provider. To learn more about your debt options, see the innovative Debt Coach.
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Harry G.
Scottsdale, AZ  |  May 24, 2011
I am not too sure which way to go, but I saw a number of complaints about Consolidated Credit Counseling online but I need someone to help me out of my bind. I'm behind on 2 of my 4 cards and will miss my next payments.
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Bills.com
May 24, 2011
I have two suggestions for you:
  1. Enter your data into the Bills.com Debt Coach for a personalized, interactive review of your debt resolution options.
  2. Complete the Bills.com Savings Center form to receive a no-cost, no-gimmick quote from a pre-screened debt resolution provider.

Let us know how you decide to resolve your debt issue.

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Julie M.
Brooklyn, NY  |  March 01, 2011
I just set up an account with Consolidated Credit Counseling Services about a month ago. I initially wanted to consolidate 4 accounts that totaled $14K worth of credit card debt. My month payment was $439. My payment was due on the 15th of February 2011, and i mailed out the payment on the 12th to ensure it would arrive on time. I call on the 17th to ensure they'd received my payment, in which case they did, but my CitiBank account had declined their offer for consolidation due to a payment plan I already have set up with them internally. On 2/28 I decide to pull my Citi account out of the consolidation, expecting a refund of the $131 (that was sent out on the 12th) that would've been sent out to Citi. I find out that the funds were being disbursed to all 4 accounts on 2/28, including the $131 to CitiBank even tho they had declined the proposals from CCCS twice. I am currently looking into another consolidation service and canceling my CCCS account. Also, the monthly fee is $49, not $15-$20.
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Tyrone L.
Chicago, IL  |  January 03, 2011
Should I go with Consolidated Credit COunseling or with CareOne Credit Counseling or with debt negotiation? I cannot decide.
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Bills.com
January 03, 2011
Tyrone, Consolidated Credit Counseling and CareOne Credit both have fine reputations. I can't recommend credit counseling over debt negotiation (or the other way around), as I don't know have enough of your financial details. Credit counseling is usually an ideal approach for someone whose credit card interest rates are causing serious problems. Debt settlement may be a better choice for you, if your primary goal is getting out of debt as quickly as possible. I recommend that you speak with a debt negotiation firm and compare the pros and cons of each approach.
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Bills.com
September 27, 2010
Thanks so much for your review of Consolidated Credit Counseling Services and we are very pleased to hear of your progress through the program. Hang in there and good luck getting and staying debt free! Bill
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Cindy .
September 27, 2010
My husband and I were really struggling with about $65K in unsecured debt (credit cards, etc.) After thoroughly reading what this company had to offer and not seeing any hidden messages in their program, we decided to give Consolidated Credit Counseling Services a try. We are 100% satisfied. We have been a client of Consolidated Credit Counseling Services since October 2008. It has been an uphill climb but we can almost see the light at the end of the tunnel. We have about another year and a half to go but what a wonderful feeling knowing that we are paying our creditors IN FULL, not having to file bankruptcy, and did it simply with determination and by following the guidelines given to us by Consolidated Credit Counseling Services. We would highly recommend this company to anyone and everyone who thinks they have no alternative but to have bad credit the rest of their lives and/or have to file bankruptcy.
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