(The shocking, whole-truth Credit Counselors don’t want You to know about Debt Consolidation)

You’re deeply in debt, wondering which way to turn. You’re confused, worried, and so stressed out you can’t think straight. What do you do?

Most people first think of the words "debt consolidation."

Many people mistakenly turn to credit counselors.

Often people struggling with serious debt make the dangerous assumption credit counselors are “the good guys” because they advertise being “not-for-profit”. Other times debtors lured by the debt management companies believe a common “half-truth” (out-right lie) promoted by the credit reporting agencies and credit counselors alike about how such debt consolidation programs affect your credit.

Do you know how your credit would actually be affected?

Before we look at the truth behind these deceptive claims, let’s clear up the terminology and eliminate any confusion.

You see, “Consumer Credit Counseling Services” goes by many names… but ALL of these different names are really the same thing. These many names include credit counseling, CCCS, debt consolidation, debt consolidation plan, debt consolidation program, debt management plan, DMP, debt management program, and of course the infamous “Non-Profit” Credit Counseling Program.

The Truth About How Credit Counseling Affects Your Credit

While enrollment in Consumer Credit Counseling Services no longer affects your numerical credit “score”*, being enrolled in “CCCS” has a VERY DAMAGING impact on your credit “worthiness.” Credit worthiness is your ability to get a loan.

(* This is assuming that the credit counseling agency actually makes your payments on time – which is often NOT the case, as many, many people who have mistakenly enrolled in such debt management plans report.)

Why does enrollment have such a damaging affect on your credit worthiness?

· Statistics show it’s most likely that you will never complete your debt management plan and will most likely file bankruptcy instead.

· Some statistics report 7 out of 10 people who enroll into debt management plans fail to get out of debt.

Just ask ANY mortgage lender in the country…

When pulling your credit report, EVERY ACCOUNT included in your “debt management plan” is listed just as a bankruptcy would be, with a notice under each account saying something similar to:


This means big trouble for you. Lenders call this a “walking bankruptcy” because it’s a *major red flag* indicating you cannot manage your money and had to hire a third party to do it for you. Plus, you still owe the debt and are at a much greater risk of filing bankruptcy in the near future.

How will these negative credit entries affect you?

You will pay much more in fees and interest rates, if you are able to obtain credit at all, during the 4-7 years you are enrolled in your debt management program.

Who’s Hiding This Hurtful Half-Truth (Outright Lie) From You?

Credit counselors, your creditors & the credit reporting agencies are all in cahoots together. They all promote the half-truth that CCCS does not affect your credit score. The vast majority, including the credit reporting agency websites, fail to mention “the rest of the story.”

Heck, even Suze Orman is guilty of promoting this lie. She proclaims on her Suze Orman Show that she does not want your credit score to go “down, down, down” and then in the next breath she encourages viewers to seek out a Credit Counselor if they are behind on their debts. Why would she do this? Endorsements from MyFICO.com is my best guess. For the record, this is horrible advise from Suze, as far too many people has discovered first hand after enrolling in such programs, only to find themselves DENIED for critical mortgage financing, refinancing or job opportunities due to the negative marks CCCS adds to their credit reports. Not to mention, people who are 90 days behind as she was speaking about DO NOT QUALIFY for CCCS. Shame on you Suze!

While it is true that credit counseling has no affect on your credit score, that’s only half of the truth.


Because credit counseling has a major negative impact on your credit worthiness.

The Truth Regarding So-Called “Non-Profit” Credit Counselors

Don’t be fooled by the words “non-profit.” Claiming a debt management plan is “not-for-profit” is ridiculous, but it’s fooled many people into making poor money choices.

· The IRS has revoked the non-profit status of over 50% of the credit counseling industry in the past two years.

· The IRS is conducting an investigation of the entire industry!

Here’s the PROOF “they” don’t want you to see:

· Debt management programs were created by the credit card industry back in the 1950’s

· The credit industry lobbied congress to achieve their touted “non-profit” status for the debt management programs.

· They are really a collection arm for the credit card industry.

· Next to minimum payments on high interest credit card debt, Credit Counseling is how creditors make most of their profit!

· Their CEO’s are paid VERY WELL from the kick backs they receive (called “fair share”, usually 15% of all payments received by you) — from YOUR creditors!

· Plus, aren’t you paying a $35-85 monthly FEE?

How’s that a non-profit?

On top of these costs to you, many credit counselors ask their customers, who come to them deeply in debt, for a “donation” to their “non-profit” organization. Often, these agencies pressure their customers into making “regular donations.”

Is this acting in your best interest?

A Secret Credit Counselors Were Able To Hide For A Long Time About Debt Management Programs

The goal of these programs is to:

· Fool consumers into paying back 100% of their balances PLUS interest when they’re in deep financial hardship, instead of filing bankruptcy or seeking debt settlement when such options may be much more appropriate.

A lot of profit has been made from these “non-profit” debt consolidation programs over the years. The banking and credit institutions, credit reporting agencies and those politically sensitive to these corporate lobbying giants all promote such debt management plans because that’s how they stay in business.

In 2004, PBS FRONTLINE and The New York Times produced “The Secret History of the Credit Card” and went on to win 2004-05 Grammy for Outstanding Investigative Journalism. (Google “The Secret History of the Credit Card” to watch this program for free online – great information you’ll wish you had known sooner if you’re dealing with credit card debt.)

Now the truth is out, but your creditors are still hoping you don’t find out…

Is There A Better Alternative Than Credit Counseling?

Now don’t get me wrong, debt management programs can be a great thing for certain people. Could credit counseling be the best option for you?

Sometimes, if a person cannot qualify for a better program to eliminate debt faster, at a lower cost and a lower payment with less credit damage, credit counseling may be best.

It may not be. I’ve helped many people get out of debt through credit counseling over the years, but only after they were educated on the all of their options, and the whole truth about each. I personally consider it unethical to promote a single solution instead of looking at an individual’s specific circumstances and situation to discover the exact solution best for them.

Share these facts with the people you know before someone else becomes another sad statistic!

Learn the difference between “credit rating” and “credit worthiness”, and learn how credit works so you can have it work for you.

Are you 100% certain Consumer Credit Counseling Services is the best option for you to get out of debt? If you want to get out of debt ASAP, then you should know other options are available that may be much better for you than debt consolidation.

Author's Bio: 

If you're ready to learn how to get out of debt FAST and which option is truly best for YOU, then you'll discover how to avoid the most common mistakes people are making and debt relief secrets most people will never know INSIDE the Debt Relief Guide Online: http://www.DebtGoToGuy.com -- FREE Instant Access!

Here to Be an Asset to You,

Jesse Niesen
Author, "Debt Free ASAP!"