Consumer credit counseling differs from debt consolidation by getting credit card companies to help your bad credit. Well that’s what they say, anyway. Debt consolidation and bill consolidation companies are generally not looking out for your best interest with debt settlement and debt negotiation. The latter handles student loans as well as credit card consolidation to prevent collection.
Many people are confused by the difference between consumer credit counseling, debt consolidation (including credit card consolidation and bill consolidation), debt settlement and debt negotiation companies. Bad credit debt consolidation and credit card consolidation also present a challenge when choosing what debt consolidation road to go down.
Consumer credit counseling a/k/a (CCCS) services work with the consumer and the credit card companies to work out a plan to lower interest rates and fees. They do not work with collection agencies or a student loan. They are non-profit and cover costs through kickbacks from the credit card companies. They are generally reputable. You make payments to the CCCS. It is a form of bill consolidation.
Debt consolidation companies operate in much the same way as consumer credit consumer counseling services, but their fees directly from the consumer in the form of extra money on top of the payments. They also offer bad credit debt consolidation.
Debt settlement and debt negotiation companies collect payments from the consumer and tell the consumer to stop making their credit card and student loan payments until they are charged off and into collection. At this point they say they will make a deal with the collection agency for a fraction of the debt. They collect a fee in the form of a percentage of the savings. These companies will also handle student loans.
By now you probably can guess that consumer credit counseling is much better than debt consolidation programs. Bad credit debt consolidation and bill consolidation are better than debt settlement and debt negotiation. Only CCCS handles student loans as well as credit card consolidation to prevent collection...
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