Credit counseling consolidates your debts into one debt so that you can make one monthly payment, which generally is lower than how much money you are currently paying on your debts. Consumer credit counseling companies supposedly negotiate lower interest rates, lower payoffs, and lower monthly payments from your creditors in return for a small fee themselves that they usually work into your total monthly payment. Consumer credit counseling agencies are supposed to be looking out for your best interest and non-profit companies; however they do not always help consumers as much as they state they are helping. Many lenders will not lend to someone in consumer credit counseling and other lenders may require that you first quit the consumer credit counseling plan in order to obtain financing. Credit counseling is viewed by many lenders the equivalent of bankruptcy and treat consumers in the counseling service with the same underwriting guidelines as those who have had a bankruptcy.

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