Free Debt Relief Analysis

It's Simple To Start

Gather Basic Information

Answer a couple of basic questions about your debt. Based on your location, debt amount and type of debt, we can recommend a path.

Financial Coaches

Your certified debt resolution specialist will show you how to pay off your debt and give you the motivation to get there.

Debt Free

Follow the payment plan you agree to with your certified specialist and you are on the way to being debt free in less time and for less money than if you did it on your own.

Questions? Call IMG 888-997-5113

Will Debt Consolidation Hurt My Credit Score?

How does debt consolidation affect your credit score? If you handle debt consolidation the right way, the long term effect on your credit should be positive. Debt consolidating the wrong way can do more harm than good to your credit report. Read below to learn how your credit is affected by debt consolidation.


Also, read more about the risks of debt consolidation.


How Will Debt Consolidation Affect My Credit Rating Positively?


One positive effect that debt consolidation can have on your credit score is that several accounts will appear to be paid off. Even though debt consolidation creates a new credit account, lenders consider the other accounts as paid in full.


Timely repayment of your new credit will also have a positive effect on your credit report in the long term. If you continue to use your credit cards, it is important to keep up to date with all of your payments in order for your credit score to improve.


Remember that it is better to borrow against your equity line than it is to apply for new credit cards over and over in order to take advantage of lower interest rates. Using personal loans for debt consolidation is typically the best option-granted you pay your bills on time-meaning your credit score will eventually raise.


How Does Debt Consolidation Effect Credit Scores Negatively?


Depending on the actions that you take after your debt consolidation, you can end up hurting your score. Missing a payment can bring your credit score down, so it is important to keep up with your debt consolidation loan payments and any other credit payments that you are required to make-or your score will drop.


Closing credit card accounts after you have consolidated the debt can negatively impact your score because longstanding accounts give you the longest credit history. You may also want to wait until the debt is completely paid off before closing accounts. This is because your overall available credit will decrease, yet your debt level will remain. That makes it look like you have maxed out all of your credit.


If you use a debt settlement program to consolidate your bills which includes negotiating a reduction of debt owed, your credit report will be negatively impacted. Not paying creditors the full amount that you owe does not look good to new creditors.


Using balance transfers for debt consolidation may also have a negative impact on your credit report, especially if you apply for a new credit card in order to use an introductory interest rate and do not pay off the full balance by the end of the trial period.


 


 



 

Benefits of Debt Consolidation

  • Lower Interest Rates
  • Lower Monthly Payments
  • Eliminate Debt in Less Time
Learn About Debt Consolidation