Can debt consolidation be bad for your credit?

Answer 1

It depends on how you do it. If you use a place that consolidates your debt by asking credit card companies & other creditors to reduce your debt or interest rate, then yes, it could be harmful to your credit rating. If you are just consolidating your debt by getting a single loan to replace other loans, then there should be very little, if any effect, good or bad, to your credit rating.

There is a chance that using debt consolidation services might affect your credit. Some debt management programs, like credit counseling, show up on your credit report. Some solutions, like debt settlement, don't show up on your credit report, but by definition cause late payments. Most debt consolidation services are there to help you get out of debt, not to sustain your credit report or credit score, so you should priorotize what you really want in seeking debt consolidation help.

It depends on your situation. If you are in way over your head like have 5-10 credit cards open and have a balance to pay for 10 of those then I would go apply. Why are you paying 10 credit cards, rent/mortgage, food , transportation , utilities and medical expenses? Where are you going to get the money to do all that and still have no money to your name? Ask yourself this: How much do you have in your bank that is a positive number? It does not matter how much money is your income, but once your employer deposit your check into your bank, everything goes out to bills which leaves you with no money. Sure it affects your credit, but at least you are not having 10 creditors bugging you for money. There are secured credit cards for people who learned the hard way of credit