I have been meaning to post my thoughts on CCCS. Hopefully this will help others...
The major creditors establish one uniform APR which they offer to all non-profit CCCS's. That's one part of the decision which you don't have to shop for to several different CCCS's. Different creditors will each have set their own APR, but that particular creditor then uses that same APR no matter which CCCS sends in the DMP (debt management proposal).
Be careful that you're looking at a CCCS, not at any so-called debt settlement or debt negotiation companies. If the website mentions anything about "saving up" your monthly payments, or paying off one creditor at a time, or reducing your debt to 40% or 50% or whatever, run like a cheetah! That's entirely different than a CCCS. Debt settlement will get every account you have charged off and it will take you years and years to have them age off of your credit reports.
There are differing opinions about using a CCCS.
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CCCS (non-profit Consumer Credit Counseling Service) may be a very good fit for your situation since you have enough cashflow to pay down the accounts but want some relief from ultra-high APR's and very large minimum payments. Shop for a CCCS just as carefully as you would for any other financial contract or service.
BTW, have the CCCS set your per-account monthly payment about $5 higher than the CCCS initially suggests to you - or, $10 per account if you can afford that. The reason is that some CCCS's quote too small a payment amount originally, which won't be enough to get the DMP accepted by the creditor. So, the proposal gets sent out but the creditor rejects it, then the CCCS sends out a substitute DMP at a couple of bucks more per month, but it's still too little...
You can see how that prolonged process could seriously delay getting your account accepted by the creditor as a DMP. Go for a slightly higher per-account payment amount from the start so you'll have much better luck at getting the very first proposal accepted.
You probably will be better able to assess the experience of a local CCCS agency and the counselor you speak with at an in-person interview than if you use one of the phone-only heavily advertised out of state shops.Even though they're non-profits, no doubt there is a range of performance. Just like stores, or doctors, or wireless companies, some agencies are excellent, others are lousy at what they do, and the rest are someplace in-between.
Choose carefully and keep assessing how things are going. If you're not satisfied, withdraw and find a better agency instead to re-enroll with.
The advantages are that while enrolled in CCCS your APR's will be reduced and your payment amount will stay level. The disadvantages are that the accounts which you enroll will be permanently closed and that you will sign a contract that you will not seek more credit until your CCCS contract has been fulfilled. That's reasonable, because why should creditors A and B drop their APR's and forgo fees if the client just turns around and opens other new credit with C and D and E? That would just be playing A and B for suckers, wouldn't it?
The biggest consideration is whether you're ready to make the commitment. Expect a stringent budget with not much fun money for the next couple of years. In terms of your credit report, some creditors include a code which produces a comment line such as "managed by credit counseling service" while the account is enrolled in CCCS.
FICO does not score down for any reference to CCCS. Some creditors (if you apply for a mortgage or a car loan before your CCCS contract is completed) may charge a higher APR for being a higher risk, or may deny. Usually you would need to get an okay from your CCCS before applying for such a loan.
When you've paid off each account, most creditors automatically remove the reference to CCCS because at that point it does, in fact, become obsolete. The account is no longer being paid through CCCS, it is closed and paid off. However, if you're nervous that a creditor might leave that comment line in place afterward, just withdraw the account from CCCS a couple of months before it would be paid off. Let it bill at the next bill date (at that point it is no longer in CCCS, ergo no CCCS remark) and then pay it off in full.
Result? No ongoing reference at all that the account had been in CCCS.
Pay extra through CCCS each time you can do so, even if it's not every month. The quicker you get the accounts paid off, the sooner you're done with CCCS and thus the sooner the remarks will come off of your credit report.
Two cardinal rules:
1) These are still YOUR accounts. Read every monthly statement from the creditors.
Look at the account online so that you KNOW when your payment was posted. If any of the due dates fall too close to when the CCCS payment will arrive (not when you pay it to CCCS - there can be a couple of weeks difference so ask the CCCS when exactly they send out payments and when you can expect it to have been received and posted by creditors), ask the creditor to move the due date, or make one extra payment upfront to get the subsequent payments to fall before the due date.
2) Don't be foolish, expecting that a CCCS will somehow care more about your accounts than you do yourself.
Using a CCCS can be a tool, a service, a means to an end.
You're still the one who needs to know how your credit is doing. There's no possible excuse for not always knowing whether the payments are posting on time. Pay good attention and you'll do just fine.
