The first thing to understand is that credit counseling and debt consolidation is not the same thing. Credit counseling involves a debt counselor working with you to assist you in making a budget so that you can pay off your debt, whereas debt consolidation involves the payment of a bulk amount of money each month allowing the company to issue payments to your creditors. You have to be careful that the company you choose is not attempting to negotiate a settlement by holding onto your payments for an unreasonable amount of time in order to coerce your creditor into settling for pennies on the dollar. Though debt consolidation may assist you in getting your finances under control, a settlement will hurt your credit, so you need to avoid that at all costs.

Do not let a debt consolidation company convince you that they can negotiate a lower payment plan than other companies because this just isn