debt consolidation's status on the credit report

Using a debt-management plan to pay off debt won't hurt your credit score, but it may make it difficult to qualify for new credit.
When you enroll in a debt-management program, you write a monthly check to a credit-counseling agency and the agency pays your creditors. A debt-management plan usually lasts three or four years. A comment stating that you're paying an account through a credit-counseling agency appears on your credit report and remains until the account is paid in full. Such a comment won't hurt your credit score ,unless the payments are made late,which you should make sure you never do.The idea is to pay off your debts and not get any new ones,so not being able to get credit right away is a good thing.Once you complete the program,you will see you score go up,as all you accounts are changed to paid in full.
debt settlement services, on the other hand, will affect your credit report. A debt settlement service asks your creditors to accept less money than they are owed and, if they accept the terms, creditors will note that on your file. This notation will stay on your record for seven years and will lower your credit score.Therefore consolidation is the best way to go.