Promises of reduced debt, low-interest loans and magical fixes to your credit score that are arriving in the mailbox or email box are tempting but be aware of the difference and know which is the best solution to get out of debt.

What is the difference between credit counseling, debt relief, debt consolidation and credit repair?

Credit counseling is the most comprehensive solution, focusing on a variety of resources to help solve financial issues. It also requires the most work and doesn’t promise immediate relief. Tools include budgeting, educational programs, access to counselors and a personalized plan. Credit counseling may (but doesn’t always) lead to a Debt Management Plan where funds are deposited into an account and the agency pays debts from that account.

Debt relief or settlement companies provide help by renegotiating the debt so that the person don’t owe as much. These companies reach out to creditors and work with them to lower the balance, interest rates or fees. Consumers can also do this to avoid the fees that a company like this will charge.

Debt consolidation companies offer loans to pay off debts all at once. People will often get drawn in by promises of a low-interest loan, but once they've gone through the application process, they'll find there are higher fees. Depending on the situation, some people may also be able consolidate and pay off debt through a second mortgage or home equity line of credit but be very careful as this requires the home to be used as collateral.

Credit repair companies promise to clean up credit reports for a fee, but the chances that they can do anything account owners couldn’t do on their own are slim. You have the right to correct inaccurate information in your file, but nobody can remove accurate negative information. Only time and conscientious payments will actually repair the credit report.

When worried about debt, people are often vulnerable to promises to fast solutions. Here are some red flags to help avoid companies with questionable practices.• Fees are charged before your debts are settled• Additional pressure to pay fees masquerading as “contributions”• The company tries to look like a government program• "Guarantees" to make debt go away or improve a credit score quickly• You are told to stop paying debts and communicating with creditors• You can’t get additional information without providing personal financial information• Promises about what they can do without actually reviewing the financial situation• The company offers a Debt Management Plan without teaching budgeting and money management• Promises that the company can erase bad credit or remove information from your credit reports

Before signing up for any program, research the business offering the financial service. Check for a business review and read the complaints on the company at BBB.org. Go to the state’s Attorney General, and Federal Trade Commission for additional information.

In the US, you have rights and you are protected by the Credit Repair Organization Act, enforced by the FTC. Legitimate companies adhering to the Act must provide:• A written contract detailing your rights and the services to be performed• A three-day cancellation period with no charges• Details on how long it will take for you to get results• An accounting of all costs and fees• Any guarantees that they are making through their marketing

If you feel like you’ve been taken advantage of by one of these companies, report them to your local consumer affairs office or state’s Attorney General. You can also file a complaint with the FTC or call 1-877-FTCHELP. The FTC may not be able to resolve individual issues, however, if there is a pattern of complaints or possible violations, they can take action.

For more information and to learn how to protect yourself, Google “BBB 10 Steps to Avoid Scams.” If you spot a scam, whether you have lost money or not, report it to BBB’s Scam Tracker at BBB.org/ScamTracker and the FTC at ReportFraud.ftc.gov. Your story can help protect consumers from similar scams.

Rick Walz is the President and CEO of the Better Business Bureau serving Northern Indiana, which serves 23 counties. Contact the BBB at 800-552-4631 or visit www.bbb.org.

This article originally appeared on South Bend Tribune: Consumer Advocate: Tips on credit repair and debt relief services