PostHeaderIcon does debt consolidation loans hurt your credit score or overall credit?

4 Responses to “does debt consolidation loans hurt your credit score or overall credit?”

  • PERCY L says:

    no it should not – but if you have defaults on your CRAA from the loans and credit cards you wish to consolidate then you may have problems getting finance to consolidate in the first place. However, shop around but be very careful of some of the Lenders out there who will ‘lend to anyone’ as they can really rip you off with interest rates and terms and conditions etc. Always ask questions and make sure you understand exactly what you are signing for – if in doubt, take someone with you for assistance. Dont let people make you feel uncomfortable so that you will sign anything – you maybe desperate but you are the customer dont forget, so dont feel intimidated. Anyway, they must give you the option of obtaining independant legal advice if you need it. It makes things a bit more difficult if you take this option but it is your right and you must feel comfortable about signing things…make sure you do understand what you are signing – the loans person must make sure you truly understand so make them go through things with you slowly if need be – dont feel embarrassed ok

  • Lori A says:

    It shouldn’t. It is really just a fancy name for a second mortgage on your home. That is provided you pay off all your debt and LEAVE your other debt at zero!

    Then just keep up your mortgage payments, on time, for a few months and your credit should improve in 6-9 months.

    The biggest problem with this kind of loan is that it doesn’t prevent you from running up the credit cards and car loans again.

    If you do go ahead, learn to live on cash for a year or two, and do so while still maxing out your retirement plans at work and contributing to IRAs. Until you are putting aside money for retirement (they call it paying yourself) and other long term needs, you can’t afford more debt.

  • john d says:

    There is some useful advice here.

  • Ben J says:


    Here are some sources which would help you:

    Debt Consolidation – Get Out Of Debt

    How to Hire a Debt Counselor?

    What is Debt Relief?

    Debt Management and Building Wealth

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