Also, some lenders look poorly upon it later on. Some institutions believe that it really is a black mark. It will depend upon the types of deals that your particular company or lender work out, and of course, your own individual circumstance. For some with absolutely NO way out, debt consolidation is a welcome option.

Take a good hard look at all the options and plans offered, and don't let a single company pressure you into something you just can't do. Make sure that you're comfortable with the plan offered before you commit to it.

In any case, it doesn't hurt to investigate debt consolidation as an option. It doesn't cost you anything to find out more information about it.

If you want a place to start your investigating, there's information and listings for debt consolidation providers on the page listed below. You'll probably find something of use there:

http://axalda.info/debt-consolidation.html
References :

Another option is for you to contact the creditors individually and have them agree to settle on balances that are less than full. The downside to this is that you will most likely need to pay the entire settlement amount in one lump sum payment. You could also contact the medical collections and work out a payment plan with them to make monthly payments. Two tips though: Make sure you get any settlement agreements in writing before paying it off and make sure they agree to report the accounts to the credit bureaus as paid in full (get that in writing too). Too often collection agencies will not report the debt has been paid off.

The thing with credit consolidation companies is that many of them have pre-arranged agreements with the credit card companies and not with collection agencies. They will be able to basically set up the same payment plan with the collection agencies that you would be able to, but you will probably end up paying a consolidation company even more because you will have to pay their fees too. The advantage is that you would probably only make one monthly payment to the credit consolidation company versus making several payments on your own to each collection company.

See the credit blog below for more information on improving your credit.
References :
http://www.fshomeloan.com/index_files/mortgageblogger.htm (credit tips and building blog)