Common Questions about Consumer Credit Counseling

Here are the most common questions that we receive about a debt consolidation program with Consolidated Credit.

No. While both options provide relief from credit card debt, they do so in very different ways.

With a debt management program, you pay off everything you charged in a way that’s easier on your budget. Your creditors agree to reduce or eliminate the APR applied to your balances and accept payments on an adjusted schedule through a credit counseling agency. The principal balance gets repaid in full, which avoids generating negative items in your credit report that can damage your credit score.

By contrast, a debt settlement program does not pay back the principal debt you owe in full. You only pay back a portion of the principal and creditors are not paid each month. Instead, you put funds into an account to make lump-sum settlement offers. As a result, you can miss payments and creditors may sue you in civil court. In addition, even if a creditor accepts a settlement, it will generate a negative notation on your credit report that remains for seven years from the date each account first became delinquent.

No. Although a debt management program provides similar benefits to what you enjoy with a debt consolidation loan, it is a different type of solution. The biggest difference is that you do not get a new loan or financing with a debt management program. You still owe your original creditors. You simply set up an assisted repayment plan through a credit counseling agency. The creditors agree to accept payments through the agency.

So, while both solutions consolidate your debts into one monthly payment and lower the APR applied to your balance, a debt management program is not a loan.

When done correctly, a debt management program will not create any negative items on your credit report. All payments that are made on time to the program are credited and noted in the credit histories of the various accounts that you include in the program. This allows you to build a positive credit history while you are enrolled. All accounts will be noted as paid in full on your credit report.

In most cases, a debt management program will provide the lowest payments you can achieve when you consolidate debt. During your confidential consultation with a certified credit counselor, the counselor will evaluate your debts and budget to determine the total monthly payment you can reasonably afford to make. Then the payment schedule gets negotiated and accepted by your creditors. All credit counseling services nationwide follow the same guidelines for the consolidation of debt, so the payment will be the same no matter which credit counseling services you end up using.

The credit counseling team works with your creditors to reduce or eliminate the APR applied to the balance you owe. In general, creditors agree to reduce APR to between 0-11%, although rates vary by client and creditor. This reduction in APR is the primary benefit that a debt management program provides. It allows you to pay down your balances much faster, so you can become debt-free in 36-60 payments, on average.

Yes. However, the credit counseling service does not pay off your cards directly for you. Instead, the agency arranges a repayment plan that your creditors agree to. Each month, you make one monthly payment to the credit counseling agency. Then the agency distributes the payment to your creditors on your behalf every month. Over time, your balances gradually decrease and get paid off.

Note that this is different from a debt consolidation loan, where you take out a personal loan that pays off your credit card balances. With a consolidation loan, your balances are paid off immediately using the funds from the loan.

There is a small fee to set up a debt management program, as well as a low monthly fee to cover administrative costs. These fees are calculated based on your budget, the number of accounts you include, and the total debt you owe. The fee limits are set by the state where you reside. Fees are capped at $79 nationwide and the average customer pays $49. These fees are rolled into the payments on your debt management plan. Note that fees for 501(c)3 nonprofit credit counseling services are regulated, so there’s typically no difference in the fees you’d pay using one service versus another.

Yes. Enrolling in a debt management program will not prevent you from applying for and getting approved for a mortgage or an auto loan. In fact, paying off your debt through a debt management plan lowers your debt ratios, which may make it easier to get approved for a new loan.

It is important to note that you will not be able to apply for credit cards while you are enrolled.

This depends on which accounts you want to enroll in a debt management program. If you hold the accounts you want to include jointly with your spouse, then you will need to enroll in the program together. However, if you hold the accounts individually, then your spouse does not need to enroll in the program with you. You can enroll on your own.

Absolutely. If you receive extra cash, for instance, you receive a tax refund, and you want to use the money to make an extra payment on your debt management program, you can do so. Simply call our customer service team and they will be happy to apply the extra payment to your account. Making extra payments will allow you to become debt-free faster and the team will help ensure that the payment gets processed correctly so you can pay off your debt as quickly as possible.

A debt management program is primarily intended to pay off credit card debt. However, you may be able to include other types of unsecured debt as well. This includes unsecured personal loans, debt consolidation loans, collection accounts, medical collections, and payday loans. The counseling team will contact the servicer for any account you wish to include. As long as the servicer agrees to accept payments through the credit counseling agency, that debt can be included.

A debt management program cannot be used for relief for secured debts, such as mortgages and auto loans. You also cannot include student loans.

People We’ve Helped…



Wichita Falls, TX

“Consolidated Credit was the best thing I could have ever done. They were honest, caring and understanding with me. I have recommended them over and over to others.”



New York, NY

“Consolidated Credit helped me get out of debt fast. Their customer service reps are very friendly and understanding. Their debt management program is the best.”



Valencia, CA

“I consolidated my credit cards so fast and efficiently with this program. Consolidated Credit made it all so easy!”

*All testimonials are from our clients. We respect the privacy of our clients. At their request, some of the pictures depicted may not be the actual client giving the recommendation.


(844) 434-0351