Consumer Credit Counseling Services (CCCS) is a nonprofit agency that assists consumers in managing their credit card debt. Services include counseling clients on financial management, bankruptcy and housing counseling and debt management plans. While CCCS does not report your participation in a program to the various credit bureaus, your credit card company may report to the bureaus that your account is in a debt management plan. This can affect your score, but the degree to which it affects your score depends on the service CCCS provides.
Housing Counseling
CCCS provides housing counseling services to educate homeowners on the options available to them to help prevent foreclosure when facing financial difficulty. Taking advantage of the services causes no change in your credit score if you are current on your payments. If you already are behind on your payments, working with the agency may improve your score by developing a plan with your lender to address the delinquency and bring your mortgage current.
Bankruptcy Counseling
The bankruptcy court requires any debtor seeking relief from their debt to go though pre-bankruptcy and post-bankruptcy counseling before you receive your discharge. Bankruptcy counseling has no effect on your credit score. If you are considering bankruptcy, typically you already have a low score as a result of late and missed payments. The bankruptcy itself may damage your credit score, but completing the counseling will not show on your credit report.
Financial Counseling
CCCS financial counseling assists consumers in developing a budget. By identifying where you are spending your money, you can eliminate frivolous expenses and have more money to pay down your debt. If CCCS can help you develop a budget that ensures you have the money to pay your monthly obligations, you may see your credit score rise as you pay off loans. Your creditors or the credit bureaus will not know that CCCS helped you develop your budget, so this service has no effect on your score.
Debt Management Plans
CCCS works with your creditors to develop a plan that allows you to make one monthly payment to CCCS. The agency then distributes the money to your creditors. If your credit score is already low when you enter the plan, the DMP notation (for debt management plan) on your credit report typically will not lower your score. If you enter DMP with a mid-to-high credit score, your score may go down, depending on your creditor's policies regarding DMP participants.
Considerations
If you have a low score when you enter a DMP with CCCS, you may see your score improve after being in the plan for a few months. CCCS makes regular payments to your creditors, which will eliminate reports of late or missed payments. The negative items on your report will remain for seven years but have less impact on your score over time.
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