The Consumer Credit Counseling Service is a non-profit organization that helps consumers manage and consolidate debt. Education is provided to help consumers manage their money and avoid ongoing financial problems. The organization has offices throughout the country staffed by counselors who are trained to help clients navigate the debt management process.
Identification
The Consumer Credit Counseling Service was founded in 1980 and is funded by grants, contributions from creditors and fees from clients, according to CCCS.com. CCCS teaches clients budgeting skills and prepares debt management plans that enable financially-strapped clients to lower the total amount owed to creditors and reduce the number of calls received from collection agencies.
Counseling Service
Clients contact CCCS counselors in person, by telephone or through the Internet. During a counseling session, your counselor reviews your income and debt from credit card, utility, medical and other bills. Information is provided on avoiding future debt problems and a plan is devised to help you meet your financial goals. Credit counselors have experience in financial counseling and are certified by the National Foundation for Credit Counseling.
Credit Consolidation
If you are unable to pay your bills, your counselor may suggest a debt management plan. A DMP allows you to consolidate all or some of your bills into one payment, which you pay to the CCCS. The payment amount will also include a service fee for the services provided by the CCCS. A CCCS counselor will try to negotiate a lower interest rate or payment amount with each of your creditors and may be able to convince your creditors to waive late payment fees. If the counselor is successful, your total monthly expenses will probably be less under the terms of the DMP. In order to succeed with your DMP, you must make payments every month to the CCCS and you must restrict your use of credit during your participation in the plan. A DMP may take 48 months or longer to complete, according to the Federal Trade Commission.
Considerations
Credit counseling may be a wise choice if you find that you are no longer able to meet your monthly expenses. Warning signs of a potentially dangerous financial situation include having credit cards that are at or near the limit, spending over 20 percent of your monthly income on credit card bills, failing to pay rent or other bills on time, reliance on credit cards to pay for basic expenses and an inability to save any of your income.
Warning
While your credit score may gradually improve once you begin making payments on a regular basis, working with a CCCS counselor will not prevent negative notations from appearing on your credit report if you failed to make payments to your creditors in the past.
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