Finding credit relief for mounting debt has now become a priority for a great many American consumers. It is estimated that there are now over 1000 companies that specialize in working with approximately 500,000 people throughout the United States who find that their debt has become unmanageable and are now seeking relief in one form or another.

In many cases people really don't know what their options are. When we talk about seeking credit relief we can basically break it down into the most popular forms which are credit counseling and debt consolidation (the two terms have basically become synonymous) and debt settlement. Let us take a closer look at these two forms of credit relief down further as we explain how they work.

With credit counseling and debt consolidation the person in debt works with a company that negotiates with their creditors on their behalf in order to get their interest rates lowered, thereby making the payments more affordable. The consumer makes a single monthly payment to the debt consolidation company who then distributes payments to each of the creditors according to the amount agreed upon.

This option will usually take 4 to 5 years to completely pay off the debt depending on how much the individual can afford to pay each month. There may be some negative marks on the credit history of the consumer but they will be erased in short time. The credit reporting agencies see that the individual is working with the creditors that they owe in a responsible manner and therefore do not levy any serious negative marks on their credit history.

Debt settlement however, works in a completely different manner. With debt settlement the borrower agrees to pay a percentage of the total amount that is owed to the lender and the remainder of the amount is forgiven. So for instance, if you owe $30,000 to a creditor that you can no longer afford to repay it is possible to negotiate that amount down to $20,000.

The reason that a lender or creditor would accept debt settlement as a debt solution is because they realize in many cases that getting something is better than getting nothing. Oftentimes finding effective debt solutions will keep an individual from filing for bankruptcy or defaulting on the money that they owe. Debt settlement will however negatively impact your credit rating and will remain as a negative mark on your credit history for many years to come.

In either case when seeking credit relief be sure that you thoroughly check into the companies that you are considering doing business with. You can begin your search on the Internet and contact the companies that you feel may be a good fit for your financial situation. Write down any questions you may have in advance so that you will not forget to ask them. If you feel that your questions are not being answered fully or that the company is not completely forthcoming then eliminate that company from consideration.

You will then want to inquire with the Better Business Bureau (BBB) and other consumer protection organizations to make sure that the company has no outstanding complaints against it and that it is indeed a reputable organization. Credit relief is within your reach so by all means become proactive and seek out the best solutions available to you to help you become debt free.