Consumer Credit Counseling – Why I love this program!
Your Credit Minute Show Notes:
- 00:00 What’s up, YouTubers? So, for those of you that are looking for a way to get out of debt, okay, obviously we’re not a debt relief company here, but a lot of our clients and a lot of inquiries we get here are looking for this type of help. So, I’m gonna give you an example of one program that I’m a big, big fan of and I’m gonna break down really what it is, give you the kind of, the bare bones um, or kind of the structure of what it is and then I’ll uh, make some suggestions in terms of if maybe that’s the right program for you. So, what we’re gonna talk about today is something called CCC. Another acronym. [inaudible 00:00:34]. Consumer Credit Counseling, guys. Consumer Credit Counseling I think is one of the better programs out there to help you get out of debt. Why? Number one, it is credit score neutral. Doesn’t hurt your credit score. Okay? Um, you’re not required to fall behind on the debts. Okay? It’s not a settlement program, it’s not a debt relief program. It’s a way to get out of debt. It’s a money management system. It’s a budgeting system.
- 01:01 So, let me break down for you really kinda how it works because it’s pretty simple stuff actually. Okay? Let’s make a little room here. So, you owe a bunch of debt. Okay? You owe a Amex for $20,000. You owe a Capital One for $10,000. You owe, I don’t know, Visa o- Walmart for $5,000. Okay? So, you have $35,000 in credit card debt right now. Okay? You’re in this debt, you can’t get out of it, you’re not sure what to do. Okay? Also, you got minimum payments of $1,500 baby. Interest (laughs) only. Guess what? Every time you send that $1,500 none of it’s going towards principal. So, you’re stuck. You’re just literally burning $1,500 every month. Why? Because uh, you were five minutes late on making these payments one month. And, guess what? Your interest rate’s 30% on this, 28% on that, 18% on this. And, keep in mind, these are fictitious and examples, okay? Don’t quote me exactly. But, your interest rates are super, absolutely insane sky high. So, you got, you’re sending $1,500 right now and you’re just kinda sending it out into the wind. Okay? So, how do we remedy this?
- 02:22 Okay, well, Consumer Credit Counseling might be the way. So, Consumer Credit Counseling agencies are typically nonprofit organizations. They’re nonprofit organizations, okay? Um, they should be fully licensed in the state that you live in to do business there. Usually, you are able to meet with someone face to face locally to sit down and do one of these programs as well. So, keep that I mind when you’re doing a Consumer Credit Counseling program. Okay? And, usually what the CCC is going to do is they’re gonna meet with you and they’re gonna come up with a budget. Okay? First thing they’re gonna do is they’re gonna say, how much do you make? Income. What are your expenses? Okay? Typically, the income is the issue. Most people that have gotten ems- gotten themselves into debt and qualified for CCC are people that have either had their hours cut at work, they’ve lost a job, or a spouse has lost a job. Okay? So, when they fill out one of these budgets, they’re gonna notice that. And, they’re gonna see that by, quickly, your expenses have gone up since then as well because, guess what? Um, the interest rates have gone up on all your credit cards too, so you just can’t afford this. Okay?
- 03:24 What they’re gonna do, and typically what they already have arranged um, is interest rate deductions. Okay? So, you see these 30- 30% interest rates? These are gonna get reduced. Okay? Usually, the CCC has arrangements with Amex, with Capital One, with Walmart card, or whatever they’re gonna be. Okay? And, they have arrangements with them that if someone does fall behind, they come through one of these programs and they’re gonna offer you a lower interest rate, as long as the CCC is managing the disbursement of the payment. So, let’s say right away they approve you for a CCC program and you get all your interest rates down to a fixed 5%. Okay? Um, but, let’s say you can still continue making this $1,500 payment. Well, instead of this having the interest only, all of a sudden, you know, you got $1,200 out of the $1,500 quickly going towards principal. So, what does that do? It really just drives down these amounts. The principal balance here, uh, they start to drop pretty significantly pretty quickly and you start getting yourself out of debt. Okay? Other times, the payment is just so outrageous um, that you can’t afford this at all. So, they’ll actually reduce the payment. They’ll get you back on your feet.
- 04:33 That way you have a little free money to put towards um, to put towards paying these things down, and really just quite simply to, to live and survive at this point, until you get that next job. What’s nice about this is it is credit score neutral. Okay? But, keep in mind, there will be a comment on your credit. Okay? There’s a comment section on the credit report. Okay? And, it will say something along the lines of managed by a CCC, Consumer Credit Counseling agency. Okay? That comments there, it’s a credit s- uh, it’s a credit score neutral comment. Okay? But, it’s placed there so if you try to get some credit card debt while you’re in one of these programs, they’re not gonna approve you. They’re gonna see the comments um, and they’re not gonna give you a new loan, which it really isn’t something you should be worrying about, you know, if you’re in debt and you’re trying to get more debt, don’t complain about that. It’s not a big deal. Okay? Um, also what’s nice is the disbursement. So, instead of you making payments to each of these creditors every month, they’re gonna do it for you.
- 05:40 So, this is you. Happy, happy, joy, joy. Okay? And, you’re gonna be sending money to the Consumer Credit Counseling agency um, each month and they will then do the disbursements. Okay? Um, the CCA will do the disbursements for you every single month. So, you’ll only have to pay one company each month. The companies will not be calling you. They’re not gonna bug you. They’re not gonna harass you. Um, it really makes life a lot easier. You have kind of a, an extra layer of protection from your creditors. Okay? So, Consumer Credit Counseling guys, um, check out some Consumer Credit Counseling agencies. You can check out the Better Business Bureau, bbb.org. You can find a list of them local to you. I would advocate you try to get into the Consumer Credit Counseling agency’s office if they have one local. If they don’t have one near you, not the end of the world, but I think there’s a huge benefit um, you know, sitting down with the agent, going through the budget together, and really taking a hard look at what your finances are. Guys, this is Nikitas Tsoukales with Key Credit Repair, and have a great day.