Final answer:
Credit counseling and debt settlement are two different methods for managing debt.
Step-by-step explanation:
Credit counseling and debt settlement are two different methods for managing debt, but they have distinct goals and approaches.
Credit counseling involves working with a credit counselor or a nonprofit organization to create a plan for managing your debt. The goal is to develop a budget, learn about financial management, and find a sustainable way to pay off your debts over time.
Credit counselors may negotiate with creditors on your behalf to reduce interest rates or arrange payment plans.
Debt settlement, on the other hand, aims to negotiate with creditors to settle your debts for less than the amount you owe. This often involves working with a debt settlement company that negotiates with your creditors to reach a reduced payoff amount.
However, debt settlement can have negative consequences, such as a negative impact on your credit score.