The reason why late payments may occur is because in some instances the creditor may not recognize the consumer credit company on your behalf despite their best efforts. The company then takes your payments for your debts and tries to disperse them to the various creditors. If some creditors end up rejecting the payments you end up with a late reporting to the credit bureaus and have to pay again the payment rejected to creditor, potentially paying the debt twice over.

ANy time you are in a counseling program, you should monitor your credit report in order to make sure the accounts you have in counseling are reporting correctly, and not reporting recurrring late payments.

In most forms of Consumer Credit Counseling the creditors are either paid short, meaning given less than the amount owed, or paid on a different schedule than what the creditor desires. Although the counseling service is sold to the debtors as a noble and beneficial service it basicly amounts to the debtors admitting that they are unable to repay their credit obligations as originally agreed. It is for this reason that lenders look upon any evidence of Consumer Credit Counseling as derogatory. I recomend that debtors explore all of their options throughly before engaging in any CCC program. Most potential mortgage borrowers have told me that the administrators of the Consumer Credit Counseling never told them that it could hurt their ability to obtain credit in the future.

Remember, there are usually several accounts included in the plan negotiated with the creditors, so you may not be getting credit for the payments required to keep each of your accounts from becoming further delinquent. As advertised, these re-negotiation plans can eliminate or reduce past due fees, and lower interest rates. Lenders are willing to do this in the hopes of getting more of their money than if they charged-off the account and sold it at a steep discount on the collection market. However, the bottom line is that the debt is not paid as agreed, credit scores can be severely impacted, and most of these plans require that you close these accounts.