CreditAssociates Review (2024)

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If you're burdened with high interest credit card payments, medical expenses, or other unsecured debts, a debt settlement company like CreditAssociates may be able to help. One of the best debt settlement companies, CreditAssociates can negotiate with your creditors to reduce the amount you owe and lower your monthly payments. However, you'll have to pay a fee for each debt settled, and there's no guarantee of success. Read on to see whether CreditAssociates is a good fit for your circ*mstances.

CreditAssociates Review

While CreditAssociates isn't one of the country's largest debt relief companies, it is among the highest rated. As a debt settlement company, CreditAssociates negotiates with creditors to reduce debts owed by borrowers experiencing financial hardship. The company works exclusively with unsecured debts, emphasizing debt from credit cards, hospital and medical bills, and business operations. CreditAssociates claims to have helped tens of thousands of borrowers become debt-free since 2007.

CreditAssociates is accredited by both the American Fair Credit Council and the International Association of Professional Debt Arbitrators. The company has highly favorable reviews on Trustpilot, where it boasts a rating of 4.9 stars out of five, with only 2% of nearly 14,000 reviews leaving a rating of three stars or fewer. CreditAssociates also has largely positive reviews on Google, with a rating of 4.4 stars out of five based on over 1,200 responses.

CreditAssociates has less complimentary reviews and feedback on its Better Business Bureau profile. The low rating there is based on only a few dozen responses; more concerning is the high incidence of complaints, with over 110 closed in the last three years. Common complaints across all reviews include the use of high-pressure sales tactics, poor communication, and a lack of results.

CreditAssociates is based in Dallas, Texas, but provides debt relief services to eligible borrowers in 44 states and Washington, D.C. CreditAssociates does not work with clients in Colorado, Connecticut, Minnesota, Maryland, Vermont, or Wyoming.

How Does CreditAssociates Work?

CreditAssociates operates much like other for-profit debt settlement services. Using your financial hardship as leverage, the company negotiates with creditors on your behalf to reduce the amount you owe and work out other more favorable terms for repayment. A wide variety of unsecured debts are eligible for enrollment, but secured debts (such as mortgages, auto loans, and home equity loans) are not.

The first step in the debt settlement program is a free phone consultation. During your call, one of CreditAssociates' certified debt consultants will evaluate your financial circ*mstances (such as income, budget, and total debt), answer any questions you have, and recommend a personalized plan to eliminate your debt. There is no obligation to proceed with the consultant's recommendations; you can decline for any reason with no penalty.

If you do choose to enroll, you'll begin making monthly deposits to a special purpose savings account instead of paying your creditors. Those deposits are typically less than the total amount you'd pay each month toward your debts. Once you accumulate enough funds in the savings account, CreditAssociates will begin working to obtain settlements from your creditors for each of your enrolled accounts.

CreditAssociates does not guarantee specific settlement terms or that your debts will be settled at all, since they cannot compel creditors to settle. However, the company claims that clients who complete the debt settlement program see their debt reduced by approximately 55% before fees or 30% after fees, with an average timeline of 36 months. You only pay a fee when you approve and fund a settlement. If no settlement is reached or approved for an individual debt, then no fee will apply for that debt.

One negative aspect of debt settlement is that your credit score may drop when you stop making payments to creditors and your accounts fall into delinquency. Additionally, over the course of the debt settlement process, you may be subject to litigation by creditors — while such cases are scarce, you shouldn't ignore the possibility. You may also have to pay income tax on the settled amount.

How Much Does CreditAssociates Cost?

CreditAssociates provides a free consultation with a certified debt consultant before you enroll in a debt settlement program. The consultation does not oblige you to continue with the program; you can choose not to participate with no penalty. If you do opt to proceed, you won't pay any signup or setup fees.

In accordance with FTC regulations, CreditAssociates does not charge any advance fees. You'll pay a performance-based fee only when a settlement is reached and meets your approval. Until then, you can back out any time at no cost. If CreditAssociates is unable to reach a satisfactory settlement, or if you reach a settlement that does not involve CreditAssociates, then you won't owe them a fee for that settlement.

CreditAssociates does not publicly disclose its fee range, but evidence suggests costs roughly in line with other debt settlement services. The CreditAssociates website states that the average customer saves 55% on their debt without fees and 30% with fees included, implying an average fee of 25% of the total enrolled debt (as opposed to the settled amount). Depending on the amount you owe, a debt management plan from a non-profit credit counseling service may be preferable.

In addition to settlement fees, any forgiven debt may be counted as taxable income. Whether that results in an a greater tax liability depends on your financial circ*mstances. Consult a tax professional for guidance on how a debt settlement may impact your return.

How Does CreditAssociates Compare to Its Competition?

CreditAssociates does not specify a minimum debt requirement to enroll in a debt settlement program. However, evidence from past clients and the website's "debt health check" tool suggests a minimum debt of $7,500, which is comparable to what you'll find elsewhere in the industry. If you owe less than that amount, you may be ineligible.

Publicly, CreditAssociates is light on details of how its services work, focusing on the big picture of debt relief without going into the nuts and bolts of its own debt settlement program. While the big picture is important, make sure you fully understand what CreditAssociates will and won't do to help you pay off your debt. Don't be shy about asking questions during your free consultation, and carefully read the agreement and other literature provided before signing up.

One standout feature of the CreditAssociates website is its debt relief blog, which offers a treasure trove of articles on topics like credit, bankruptcy, budgeting, and more. These articles are available whether or not you enlist their services.

CreditAssociates Frequently Asked Questions