 TITLE: What Is Debt Consolidation? CONTENT: Is Debt Consolidation Different from Debt Settlement?\n-----------------------------------------------------\nAnother way to tackle debt overload is debt settlement, but this is not the same as debt consolidation and can seriously damage your credit. With debt settlement, you negotiate to pay a lower amount of debt with your creditors than you originally owed. You can either try doing it yourself, or you can hire a debt settlement company to do it for a fee.\nDebt settlement doesn't lower your interest rates, as a debt consolidation loan or balance transfer credit card does—just the balance. And settling your debt can have major negative consequences on your credit scores, since you're not paying the debt as agreed. In addition, debt settlement companies typically have you stop making payments on your debts, which can cause your credit scores to plummet even further.\nDebt consolidation, on the other hand, shouldn't negatively impact your credit if you make all of your payments on time—in fact, if it helps you avoid late payments and you pay the loan as agreed, debt consolidation could even help your credit. END