Common Questions

What is Consumer Credit Counseling Services (CCCS)?

Consumer Credit Counseling, otherwise known as CCCS, is a service that offers debt management solutions in the form of budget counseling, various financial educational programs and assistance in using credit properly to avoid bankruptcy. In addition, most CCCS agencies will offer a Debt Management Plan (DMP), otherwise known as debt consolidation. You turn all of the debts you wish to consolidate over to the CCCS and they pay your creditors on your behalf. You make one monthly payment to the CCCS until all of your debts are paid in full.

Debt management services, like CCCS, should only be used when you are in dire straits and can't resolve debt issues on your own. Here's why:

Your Credit Will Be Damaged

When you are enrolled in a Debt Management Program, your current creditors will report "credit counseling" or "DMP" to the bureaus. Qualifying for new loans will be very difficult, if not impossible. If you do qualify, you are likely to get stuck with high interest rates. Potential lenders will consider you as too great a risk; if you can't handle current liabilities how will you be able to handle any new loans?

This stigma not only stays on your report during your DMP enrollment (usually 4-7 years), it could potentially stay on for an additional 7 years; the typical reporting time for negative information.

Despite the negative listing, using a CCCS is still more favorable than declaring bankruptcy. Bankruptcy is the worst possible listing, but credit counseling is a close second and should only be used as a last ditch effort.

It Will Cost You More in the Long Run

Under a CCCS plan, your debt payments are spread out over a longer period and because you are still being charged interest, your total balance will increase. The CCCS will also charge you a set-up fee, monthly service fee, and a commission on the money they "save" you.