One way to improve your credit score and work toward consolidating debt, and that means getting a debt consolidation loan.  Searching the Internet can give you several options. If you've been considering the steps of getting a debt consolidation loan, versus choosing a debt management or debt settlement service, you sholud know the main differences, pros and cons of each so that the option you select is the right one for your needs.  It's understandable that many people get confused about these three different options, but they eahc have specific differences and ways to help individuals pay down debt. Here's a look at each.

Debt Consolidation Loan

A debt consolidation loan will transfer your credit card or other revolving debt to a single, lower interest rate loan. You can find lenders by searching online; start with your own bank, then check services like Lending Tree.  Usually, this type of loan is similar to ahome equity loan, in that the equity  you have in your home will be the collateral for this type of debt. Today, it's more difficult to get a loan based on home equty, due to the instability of home prices, however it's still possible if you have equity in your home. For people with good credit, it might even be possible to get an unsecured loan, if you also close the credit cards.  If your credit is not so good, the lender may ask you to close your cards as a condition of the loan.  when you get a consolidation loan that has a lower interest rate, theoretically your payments will go down and you can afford them better each month.  Be sure though that the length of the loan doesn't mean you are stil paying a ton of money in interest over the life of the loan, and be sure to pay the loan off you will actually be able to afford to pay on the principle and that will help you to eventually get yourself out of debt.

Debt Management

A debt management company is a little different from a lender. They work with debtors to build a plan to get control over their debt and other finances. These types of companies show borrower the way to set up a budget and keep to it each month.  Often, the borrower will create a weekly schedule to show when to pay each of their debts, until they are paid off.  Usually, debt management companies are set up as non profit companies, and their purpose is to work with consumers to get them on the right financial track. you wont' find these companies offering any loan products, and they usually don't work with creditors either to reduce debt. But they will work with individuals to give them the right tools to build a secure financial future.

Debt Settlement

Unlike lenders or debt management companies, debt settlement companies will directly contact your creditors about your credit accounts. There are agencies like Consumer Credit dounseling Service which you can find online at locations near you.  These copmanies will work to negotiate with your current credit card companies and attempt to reduce the balances you currently owe. They are able too work out arrangements that can lower your interest rates, or get a reduction of the penalties and late payment fees that are piling up on your accounts.  They may also be able to reduce the balances you owe the credit card companies. Many times their arrangement with you will require that you send them a single payment, and they disribute the payments to the companies you are paying. this makes it easy to budget.  beware however that this service may have consequences on your credit report, as it will be reported to the credit reporting agencies that you are working with a debt settelment company.

Any of these types of copmanies can be found online with a simple search, be sure to include your location in your search to find companies near you. It's best to find a company online, but visit them in person – don't work with agencies online only, as this is a potential way to get taken advantage of. You want to meet these companies face to face, and get references for the work they do.  Once you find a good company, these services can certainly provide the debt help you need.