First, understand that your credit score can go down whether you participate in a debt settlement program or not. If you are struggling with debt, have too many credit cards, make only the minimum payments your credit score can go down. In addition, it is likely that if you are not be able to make payments (or more than the minimum) and late payments, growing balances (from APRs and late fees) and maxing out your cards will have a negative impact on your credit score.
Working with a debt settlement firm to resolve your debt can minimize the impact of the settlement process on your credit score and the credit reporting by your creditors. You may have to stop making your payments on your credit cards and while this can lower your credit score, if your credit score isn't that high you may not even see the score lower by that many points. Think of it like this, to get ahead of the debt cycle and get out of debt you might have to take one step back to take two steps forward. Yes, your credit score can go down by working with a debt settlement company or law firm, but in the long run you will resolve these debts which can increase your score and credit worthiness for the better. It has to be done carefully and by a professional law firm experienced enough to understand credit, debt and the impact of debt settlement on your credit score. It is hard to determine how much your score will be impacted, since everyone's credit is different. For one person it could just be a few points, or another it could be 20 points or more. But in the end you will be out of debt and into cash flow positive, which is the big picture goal for personal finance management.
Sometimes you have to consider credit score as a secondary issue. Leaving your debts as is can result in those credit card balances to grow until you max out your credit cards (or are close) which will have a negative effect on your score. If the debt problem isn't resolved, it will simply continue to get worse and worse! While with debt settlement, you may lose a few points off of your credit score in the beginning after you complete the program with a debt settlement law firm you can wind up with a better credit situation than before you started!
In many cases, working with a debt settlement law firm will not only help you resolve your debts, but learn to be less dependent on credit cards and loans, more dependent on budgeting and realistic money management. This will help your credit score will restore itself naturally over time once your debts are being resolved. Not mention, your credit score will likely stay high because you are no longer relying on credit cards, loans and debt!