A Debt Settlement Company reduces the debt by approximately half of what you originally owe, whereas, with Credit Counseling you pay back approximately 115-125% of what you originally owe. Debt Settlement is not as damaging to the credit report because it shows up as late payments on there and those can only affect the credit score for a period of 24 months. Whereas, with Credit Counseling they show up on there as a third party helping you to get out of debt and most lenders view that the same way they view a bankruptcy. Credit counseling will tell you that it will not affect the score, and it doesn't, but it instead appears similar to a chapter 13 bankruptcy. What most people don't realize is that they are in bad situations credit wise, and they think they are ok because they have a decent credit score. If you have spent over 75% of your credit limit, or your percentage rates are over 11-12%, or they have dropped the amount of credit they are extending to you, or you can't get a loan, then chances are you don't really have good credit even if you have a good credit score. This means that you have to address the debt load. Once you have addressed the debt load you are in a more favorable lending position. Credit always comes back, it doesn't take that long especially if you are being coached by the right people. Each situation is different, so it depends on how much income you actually have to put towards getting out of debt. Sometimes the better answer is bankruptcy. That is a situation that needs to be assessed by a professional before you make a decision. I hope I have given you some insight. If you have anymore questions, please visit my personal profile to send me an email
