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.
Business Insider's personal finance team compared CreditAssociates to the best debt relief companies and found it to be a standard offering. 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.
Pros and Cons
Pros
- Debt counseling experience: The debt counselors will work with your creditors on your behalf.
- Debt reduction: Your overall debt, interest, and late payments may be reduced.
- Debt relief blog: Access to articles and resources on credit, budgeting, and more.
Cons
- Expense: There is a fee to be paid for each debt settled.
- No guarantees: There is no guarantee of success.
- Taxable income: Forgiven income may be taxable income.
Get Debt Relief
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
Compare CreditAssociates Debt Relief
Cost: 15-25% of total enrolled debt
- Includes private student loans
- Accredited with the AFCC
- Fee transparency
- $7,500 minimum debt requirement
- Customer service conducted exclusively over the phone
- Lack of legal or tax guidance
National Debt Relief boasts an average savings of 25% (after fees) for clients who complete a settlement program, and has extensive positive reviews online. However, the debt settlement process has several potential pitfalls, and there may be other solutions better suited to your needs.
National Debt Relief
Cost: 15-25% of total enrolled debt
- Online knowledge hub and blog
- Accredited with AFCC and CDRI
- Only available in 30 states
$7,500 minimum debt required
15-25% of enrolled debt + $9.95 account sign-up fee and $9.95 monthly fee
- Lower minimum debt than other debt settlement companies
- Helps settle private student loans
- Customer reviews mention long settlement times
- Monthly fees for dedicated account
- Must have a minimum total debt balance of $7,500 to qualify (some states have laws setting higher minimums)
- Fee ranges from 15% to 25%
- One-time fee of $9.95
- Monthly fee of $9.95
- Available in these states: AL, AK, AR, AZ, CA, DE, FL, IA, ID, IN, KY, LA, MA, MD, MI, MN, MO, MS, MT, NC, NE, NM, NV, NY, OK, PA, SD, TN, TX, UT, WI
CreditAssociates Overview
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 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 CreditAssociates Works
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.
Publicly, CreditAssociates is light on details on 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.
Key Features of CreditAssociates
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.
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 it 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, no fee will apply for that debt.
Costs 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 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 nonprofit 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.
CreditAssociates 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 over 18,000 reviews leaving a rating of three stars or fewer. CreditAssociates also has largely positive reviews on Google, with a rating of 4.3 stars out of five based on over 2,000 responses.
CreditAssociates has complimentary reviews and feedback on its Better Business Bureau profile. It has a 4.16/5 customer review rating there based on 286 reviews and an A+ Better Business Bureau rating. Common complaints across all reviews include the use of high-pressure sales tactics, poor communication, and a lack of results.
CreditAssociates Alternatives
See how CreditAssociates compares to two alternative services: National Debt Relief and Freedom Debt Relief.
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 its 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.
CreditAssociates 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 its services are the right fit.
Freedom Debt Relief charges a fee typically ranging from 15%-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%-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.
Why You Should Trust Us: How We Chose the Best Relief Companies
We rated CreditAssociates according to its membership with appropriate trade associations and accreditation organizations, its fee structure, the number of years it has been in operation, its money-back guarantees in cancellation policies, and customer satisfaction based on personal reviews.
Read the full breakdown of how we rate debt relief companies.
FAQs
Is CreditAssociates a legit company?
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.
Does CreditAssociates hurt your credit?
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.
What is the fee for CreditAssociates?
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.
Can Credit Associates help with all types of debt?
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.
