Even if you are short on money, debt reduction can be a helpful way to begin to work your way out from under a mountain of debt and get on the road to financial well-being. Unlike bankruptcy and debt settlement, debt reduction has the benefit of not forcing you to incur long-term damage to your credit report. In fact, the process of gradually paying down your account balances is likely to increase your credit scores. In addition, unlike debt consolidation, a debt reduction plan does not involve taking out yet another loan. Instead, the basic concept of debt reduction is simple: you develop a systematic plan for reducing your debt and increasing the funds you have available to make debt payments and stick to it. If you are diligent about following the steps you have set forth in your debt reduction plan, you are likely to see significant changes in your family's financial health within a relatively short time span.