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Cost: Estimated 25% of debt (fees not publicly available)
- Charged for the amount settled rather than amount enrolled
- Debt relief blog
- Money-back guarantee advertised
- AFCC and IAPDA accredited
- Fees not publicly available
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 circumstances.
Overview of CreditAssociates
Introduction to CreditAssociates
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.
User reviews and ratings
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.
Company history and background
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.
Services offered by CreditAssociates
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.
Debt settlement services
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 circumstances (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.
Time to Resolve debt
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.
Potential Drawbacks and Considerations
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 — remember, you legitimately owe your creditors money, and they do not have to settle for less than what is owed to them — and while such cases are scarce, you shouldn't ignore the possibility.
You may also have to pay income tax on the settled amount.
Pricing and Fees
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 are 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 a greater tax liability depends on your financial circumstances. Consult a tax professional for guidance on how a debt settlement may impact your return.
Comparison with other debt relief companies
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.
CreditAssociates vs. National Debt Relief
National Debt Relief also offers free consultation with no upfront fees; there's also no fee for backing out as long as you do so before your debt is settled. You have to enroll a minimum of $7,500 in their program. Once National Debt Relief negotiates a settlement, the fee averages 15-25% of the total enrolled debt. Completing the settlement program takes 24-48 months on average.
Credit Associates is not as transparent as National Debt Relief about what it actually does to get your debt settled, so be sure to ask plenty of questions before signing up. If you want fee transparency without having to ask, you might consider National Debt Relief.
CreditAssociates vs. Freedom Debt Relief
Freedom Debt Relief offers potential customers a free consultation to determine if their services are the right fit.
Freedom Debt Relief charges a fee typically ranging from 15% to 25% of the total debt in the program, with the average fee being 21.5%. Your fee will depend on the amount of debt (at least $7,500) and your state of residence. You will only pay the fee after you authorize the settlement and the first payment has been made. Some customers can settle their debts within two to four years.
An important point to consider about Freedom Debt Relief is that in 2019, a lawsuit from the Consumer Financial Protection Bureau (CFPB) alleged that Freedom Debt Relief misled and wrongfully charged fees to customers. The company settled with the CFPB, agreeing to pay $25 million in customer restitution and penalties. In 2023, Freedom Debt Relief settled a class-action lawsuit that alleged it violated the Telephone Consumer Protection Act. The company agreed to a $9.75 million settlement.
For that reason, you may want to choose CreditAssociates over Freedom.
CreditAssociates vs. Pacific Debt Inc.
Pacific Debt Relief does not charge upfront fees, and service fees range from 15% to 25% based on the amount of your debt and your state. Their fees are rolled into your monthly payment and are due only when you start to see results. You must have at least $10,000 in unsecured debts to work with Pacific Debt Relief. The average time of completion is 24-48 months.
Pacific Debt Relief requires a higher minimum debt balance to enroll, even though it is doing the same work as CreditAssociates. If you're deciding between the two, go with CreditAssociates.
How does CreditAssociates work?
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
Yes, CreditAssociates is a legitimate company. It is accredited by the American Fair Credit Council and the International Association of Professional Debt Arbitrators. The company is also reviewed favorably on Trustpilot and Google. However, there is a high incidence of complaints on its Better Business Bureau profile.
CreditAssociates may hurt your credit, like any debt settlement company. Debt settlement typically requires you to stop paying creditors in order to provide leverage during the negotiation process. That causes your accounts to become delinquent, which is likely to have a negative impact on your credit score when reported to credit bureaus.
CreditAssociates does not disclose its fees publicly, but anecdotal evidence suggests fees in the range of 25% of the total enrolled debt. You only pay a fee when a debt settlement is approved. There are no monthly or other ongoing fees.
Credit Associates does not help with all types of debt. It works only with unsecured debts like credit card debt, medical bills, and personal loans.
