It is a fact that anything short of paying off your debts in full and on time will affect your credit scores negatively.
But there are times when you may be struggling with huge high interest debts.
In fact you may behind on your payments and the situation is likely to get worse.
In such situations your credit score will already be negatively affected and opting for settlement will not make it any worse.
Moreover if you are faced with bankruptcy then the best option is to opt for debt settlement, because in case of bankruptcy your credit scores will be damaged almost irreparably.
On the other hand, in the case of a settlement you can build your scores over a reasonable period of time.
Whenever you are trying to settle your debts, it is a good idea to concentrate more on the unsecured debts that you have.
Unsecured debts have a much higher rate of interest than secured ones.
On the other hand the strategy of unsecured loan providers is to recover most of their money with the first few installments.
This makes them more flexible at the time of a debt settlement.
In fact there are many debt settlement companies which specialize in negotiating and settling unsecured debts.
They will negotiate with the creditors and settle the debts for amounts which are much lower than the original amount payable.
They help you in consolidating various high interest loans with a single low interest one.
They also help you in converting unsecured loans to secured ones.
The procedure of debt settlement ensures that you become debt free in two years or less.
The settlement companies also provide guidance on how to build back your credit scores.