Managing your money can be difficult. But when life throws you curveballs, that’s when financial trouble can arise. Of course, bad financial habits can also erode your financial security over time.
No matter how you came upon your debt issues, you have options for managing them. A nonprofit such as Consolidated Credit can help you explore and pursue those options. Here’s a comprehensive review of Consolidated Credit to help you understand how it may be able to help you with your debt.
What is Consolidated Credit?
Consolidated Credit is a not-for-profit company dedicated to helping people improve their financial lives. Since launching in 1993, the company has helped 6.5 million people. Thanks to the company’s dedication to its customers, the company has earned an A-plus rating with the Better Business Bureau (BBB). Although Consolidated Credit is based in Plantation, Fla., it helps people nationwide, including in Puerto Rico, and serves both English and Spanish speaking populations in the United States.
Consolidated Credit offers a wide range of services to help people struggling with debt. Some of its services include credit counseling, corporate financial wellness programs, counseling for first-time homebuyers and debt management plans. All Consolidated Credit counselors are Certified Personal Finance Counselors. Its counselors are trained to help people better understand how to eliminate their debt as fast as possible.
Breakdown of Consolidated Credit services
If you’re considering working with Consolidated Credit, it’s important to understand whether you’ll qualify to work with them. Most of Consolidated Credit’s services are free, but its debt management plan carries some fees.
This table explains the fees and limitations associated with Consolidated Credit’s debt management plans. It also shows other critical information about the company as a whole.
Credit counseling, debt management plans, homebuyer counseling, reverse mortgage counseling, corporate financial wellness.
Minimum debt required
More than $1,000
Yes, but no impact on credit (soft credit inquiry)
Expected time to debt payoff
Generally 36 to 60 monthly payments
Initial consultation fees
Free initial consultation.
Initial setup fees
Initial setup fees vary by state, but will be similar to your monthly fees.
No cancellation fees.
Up to $79 per month. On average, $40 per month).
Types of debt accepted- debt management plans
Unsecured debts (credit cards, most personal loans, medical debts less than 1 year old). Debts in collections (charge-offs) may be allowed in the debt management plan. Some payday loans or cash advances can be consolidated.
Service limitations- debt management plans
Once you enroll in a debt management plan, you must make the payments as agreed. Failing to make the payments could lead to more fees, penalty interest, or being sued.
Member of the Financial Counseling Association of America (FCAA).
A-plus rating with the BBB.
Free tools and resources
A consultation with a credit counselor at Consolidated Credit is free. Other free resources include ebooks, videos, webinars and in-person seminars.
If you enroll in a debt management plan, you’ll work with a specific counselor who will help you through the process.
- Consolidated Credit offers credit counseling services to people in the U.S. and in U.S. territories, including Puerto Rico). If you live in the U.S. and owe debts to creditors in the country, you may qualify for Consolidated Credit services.
- To qualify for Consolidated Credit’s debt management program, you need to go through a free credit counseling session. A certified personal finance counselor will help you decide whether Consolidated Credit’s debt management program is right for you. They will also help you review options for DIY debt consolidation.
Consolidated Credit advertises that people with poor credit and people with huge balances are most likely to benefit from a debt management plan. If most of your debts are in collections, you may have to pursue debt settlement options. On the other hand, if you still have good credit, debt consolidation might be the right approach for you.
What are the benefits and risks of Consolidated Credit?
Not for profit company
Credit cards are frozen during debt management plan.
Free initial consultation
Cannot take out new credit cards during repayment.
Consider a variety of debt payoff options.
Some complaints about customer service
Debt management plan reduces interest rates and fees.
Must make timely monthly payments.
Highly rated customer service
How much does Consolidated Credit cost?
Consolidated Credit offers free credit and personal finance counseling. During an initial 30 to 60 minute consultation, a Certified Personal Finance Counselor will analyze your debts, your budget and your credit score. If the counselor recommends a debt management plan and you choose to enroll, these are the fees you can expect.
Initial setup fee (debt management plan)
Varies by state
Monthly fee (debt management plan)
On average, $40 per month, but can be as high as $79 per month
In certain situations, Consolidated Credit may waive the debt management plan fees for a limited or extended period of time.
In addition to its debt counseling services, Consolidated Credit offers several services for current and aspiring homeowners. Its services include free home buying and mortgage readiness classes and information on home retention and foreclosure prevention for people struggling with their mortgage. Seniors looking for education and counseling about reverse mortgages may speak with a HUD certified counselor.
Consolidated Credit also offers several free online resources for people looking for financial education. Its free eBooks and videos cover a range of topics including marriage and money, the financial costs of children and more.
How long does the program take?
When you sign up for a debt management plan at Consolidated Credit, you can expect to make payments for about three to five years before you’ve paid off your debts.
Consolidated Credit is not a debt settlement company. It will not help you negotiate for lower balances on your debts. However, the company will negotiate a lower interest rate (usually 0% to 11%) and for lower fees. By lowering your interest rate, Consolidated Credit may be able to cut your payments down by 30 to 50%. Over the course of three to five years, you will pay off the entire balance that you owe.
Is Consolidated Credit safe to use?
Consolidated Credit is a not for profit company, with a solid reputation. It’s been in business for 25 years with an A-plus rating with the BBB, and it hasn’t had any legal actions taken against it.
Although most online reviews of Consolidated Credit are positive, some customers have issued complaints. Many of the complaints stated that Consolidated Credit improperly managed a debt payoff plan, and the result of the mismanagement was negative marks on a credit report or late fees.
On top of that, all of Consolidated Credit’s counselors meet the Uniform Debt Management Services Act accreditation standards. That means all counselors are qualified to help you with your debt management strategy, and they have expertise in helping you with debt management services.
How do I sign up for Consolidated Credit?
- People looking for a free a counseling session from Consolidated Credit can reach out to the company online or via the phone. People who want to talk with a credit counselor right away can call Consolidated Credit at 1-844-861-9479.
Those who want more time to gather information, can gather information at their own pace by filling out Consolidated Credit’s debt analysis tool. Once you’ve filled in all the necessary information, a credit counselor will reach out with recommendations on the best way for you to attack your debt.
What to expect after signing up for Consolidated Credit
Here’s how Consolidated Credit’s process works:
- Step 1: During your first credit counseling session, a certified personal finance counselor will review your debts, your budget, your credit score and your options for debt relief. The counselor will help you understand whether your debt relief options.
- Step 2: If the counselor does not think a do-it-yourself option for debt relief will work for you, they may recommend a debt management plan. The counselor will disclose the fees associated with the plan, and you can choose whether to enroll in it.
- Step 3: During the payoff period, you will not be able to use your credit cards. You also cannot open any new credit card accounts. In most cases, you should be able to apply for an auto loan or mortgage during the payoff period.
- Step 4: Anyone who chooses to enroll in a debt management plan will stop making payments to their creditors, and start making a monthly payment to Consolidated Credit. Consolidated Credit will distribute the payment among your creditors.
- Step 5: After 36 to 60 monthly payments (less if you can add extra money to your payments), your debt will be paid off.
Alternative methods to pay down debt
Debt management plans are one method that you can pursue debt relief, but they aren’t the only option. In some cases, you may be able to pay off your debts faster using a DIY payoff plan. In other cases, your debt may be so overwhelming that bankruptcy or debt settlement makes more sense. Review these five options to see if one fits your needs better than a debt management plan.
Debt consolidation loans allow you to refinance all your existing credit card balances into a single loan (usually an unsecured personal loan). By refinancing all of your debt, you’ll deal with just one monthly payment instead of several. In most cases, a debt consolidation loan will also lower your interest rate, so you’ll pay less interest over time.
You may be able to explore personal loan offers from lenders using this tool from LendingTree. You’ll input information about yourself and what you need out of a loan. Afterward, you’ll see what lenders have to offer you.
- Usually have fixed interest rates.
- Fixed time to payoff debt.
- Lower interest rates than most credit cards.
- Likely to increase credit score, when paid as agreed.
- Loan may have an origination fee.
- Interest rate savings not guaranteed.
- Retain access to credit cards (which could lead to more debt).
Minimum 500 FICO
Minimum Credit Score
24 to 60
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Balance transfer credit card
People with high credit scores may qualify to transfer their existing credit card debt to promotional 0% APR balance transfer credit card. These credit cards offer a 0% APR on balance transfers for a limited period of time. After the promotional period ends, your interest rate will increase. Most of the time, borrowers need to pay a balance transfer fee (up to 5% of the balance) when using a balance transfer credit card.
- Lowest possible interest rate.
- Usually increases credit score (by decreasing credit utilization).
- Opportunity to transfer balances again if you cannot pay off balance during the promotional period.
- Interest rates increase following the promotional period.
- Increases available credit, which could lead to more debt.
- Balance transfer fees may slow down repayment.
Bankruptcy is the legal process that helps consumers and businesses resolve debt issues when they cannot handle their debt obligations. Most consumers will pursue Chapter 7 or Chapter 13 bankruptcy. If you cannot handle your debt load, you may want to speak to a bankruptcy attorney.
- Complete relief from debts (following liquidation or repayment).
- May be able to keep some or all assets.
- Addresses most forms of debts.
- Decisions are final.
- Hurts credit score
- You may not be able to take out a mortgage for up to two years following bankruptcy.
- Chapter 13 bankruptcy repayment plan may last three to five years.
- Can be expensive (high attorney’s fees and legal fees).
Debt settlement with an attorney or debt settlement company
Debt settlement is the practice of renegotiating the terms and balances of debts that are in or near default. Sometimes debt settlement companies will advertise that they can negotiate for repayment terms that are “pennies on the dollar” compared to what you owe.
The Consumer Financial Protection Bureau (CFPB) warns that working with a debt settlement company may be risky — it can lead to higher fees, penalty interest rates and other problems. Settling debt is also likely to have tax implications. Hiring an attorney that specializes in debt settlement may lead to less risk. You can find consumer advocacy attorney by searching the database at the National Association of Consumer Advocates.
- May eliminate a portion of your debt.
- Working with an attorney reduces your risks of legal repercussions.
- Allows you to avoid working directly with creditors or collections agents.
- May hurt credit score.
- May lead to more fees and penalty interest rates.
- Can be expensive.
- Debt settlement often has tax consequences.
DIY debt settlement
People with debts in collections may be able to settle their debts on their own. Settling debts means negotiating the terms or balances of a loan. In general, collections companies will reduce the balance that you owe in exchange for a payment guarantee.
If you wish to pursue debt settlement on your own, the CFPB advises you to learn about the debt in collections, create a realistic budget for paying off the debt and negotiate with collectors.
- No fees or expenses.
- May eliminate a portion of the debt you owe.
- Can help you avoid bankruptcy.
- May not successfully negotiate for an affordable plan.
- May accidentally revive a time-barred debt.
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