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Debt consolidation can potentially hurt your credit score if you dont use the new loan responsibly, such as by missing payments or taking on even more debt instead of only paying off old debt. However, if you use it correctly, debt consolidation can have a positive impact on your credit score and help you pay down debts faster.
Key Takeaways
- Making on-time payments on all your outstanding debt can cause your score to increase.
- Making late payments and missing payments will each result in your credit score decreasing.
- Consolidating debt can have both good and bad impacts on your credit score and history. Responsibly repaying your debt consolidation loan or line of credit can have a positive impact on your credit score.