You can use this article to evaluate if Consumer Credit Counseling (CCCS) is right for you. Credit Counseling is when you hire a company to manage the payments of your consumer debt for a prescribed period of time. The average CCCS program will be 3 to 5 years long. In this article we will look at the pros and cons of Consumer Credit Counseling to help you see if it is right for you.

Let's take a look at the pros of a CCCS program first;

1. You delinquent accounts will have a Re-Rating. If you started a credit counseling program with delinquencies already showing on your credit report, it is possible after a period of time to have those delinquent accounts re rated or re aged. Usually this can be done after three months of on time payments. You want your accounts to be re aged as soon as possible. The quicker it is done, the quicker your credit score will go up.

2. Being in a credit counseling program will simplify your payments. For a lot of people, organization can be the biggest killer when it comes to on time payments. If you have 10 credit accounts, you are more susceptible to missing a payment versus if you were just making one payment. With so many payments to worry about, it is no wonder that people will miss payments. The average credit counseling client has more than 5 accounts in the program. You simply pay the debt management company and they then distribute the money to pay all of your creditors.

3. If you have had any late payments to your credit cards you are likely to be paying interest rates that are greater than 20%. Creditors are most likely to reduce your interest rates if they know that you are in a credit counseling program. Some even will take your rate to 0% once you enter the program. This will help you get out of debt much faster.

We have looked at the pros, now let us take a look at what the downside of being in a debt management program are.

1. Even if you know that you need to be in a credit counseling program, you may find that you still cannot make the minimum monthly payment. At this point you may want to consider debt negotiation. Visit GetPreQualified.com to find more information on debt negotiation and debt settlement.

2. Once you have entered the program, you may find that you cannot use your credit cards because they have been frozen. Even if you have been paying on time prior to entering the program, they can still be frozen. To a creditor, by you entering a CCCS program may be a sign of financial trouble and they do not want to risk any more credit with you.

3. Being in a CCCS program will be a mark on your credit report. It may not impact your credit score but it may impact someone from giving you additional credit.

4. If you are trying to get a mortgage to buy a home, being in a CCCS program may impact your ability to get a mortgage.

5. Do not assume that just because you signed up for a credit counseling program that everything will be fine. You need to make sure that your creditors are being paid monthly until your program has kicked in and is making reliable payments to your creditors. If you miss any payments your credit will suffer.

The reality is that once you are in debt and are over your head there are not too many great choices for how to get out of debt. Consumer Credit Counseling is a choice that exists, but it is not perfect by any means. Do your homework and ask a lot of questions. Getting out of debt is a commitment and something to look forward to. The peace of mind of being debt free is worth all the work.