Consumer Reports recently covered a story about how settlement companies – hired by an individual to negotiate credit debts and lower what is owed the lenders – are not delivering debtors a good enough deal. In many cases, these companies are ruining a person’s good credit and even breaking laws with their practices.

Is debt settlement a risky endeavor? Here’s what you need to know to protect your credit from unsettling debt settlers.

Forget paying any large up-front fees. Any worthy debt settlement company (and there are thousands out there vying for your business) should not ask for a significant amount of money before helping you. As this USA Today points out, fees should be tied to results. Yet millions of Americans in their financial frustration and fright are being taken advantage of by crooked debt settlers. The article recommends finding an agency through the National Foundation for Credit Counseling.

You don’t have to default. TotalBankruptcy.com offers a long list on what to watch out for with debt settlement companies. One of the biggies if the debt settlement representative involved suggests defaulting or stop payment on any of the accounts. Some companies insist that they cannot negotiate with creditors until an account is in default, but this is untrue. However, you do risk your credit taking a hit by hiring a settlement agency.

Your credit might do better if you settled debts yourself. It is in a creditor’s best interest to work some kind of payment out with you, as this link explains. As a consumer, you have every right to call up your lenders and attempt to reduce the debt yourself. Make sure you are getting all agreements in writing. In some cases, you might get a better deal than if the debt settlers took over accounts. For more information on how to settle with a debt collector, try this Bankrate.com link.