You get lower payments with less added interest, so you can get out of debt as quickly and affordably as possible. The information below can help you understand what kind of impact debt consolidation can have on your credit profile and credit score.
Additionally, if the company managing your payments under your debt consolidation plan fails to make the payments on time, you are responsible, and those late payments may be reflected on your credit reports.
Plus, if the company convinces you to close all of your credit card accounts, it may negatively affect your utilization and you have no way to rebuild a rich history by using those cards in the future in a responsible way.
They also can provide budgeting and financial management training and advice to help you along the road to recovery.
helps you rein in out-of-control debt payments when things like credit card debt start to take up too much income and throw your budget out of balance.
With consolidation, you’re still paying your debt off –you’re just doing it in a way that’s more manageable for your budget.
So unless you choose an option that’s not right for your situation, there’s nothing negative that would appear on your credit report.
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Dealing with debt on multiple credit cards is stressful, which is why many people consider consolidating their several debts into one.
), we recognize that our site does not feature every card company or card available on the market.
Additionally, our star ratings are a mix of user feedback and Nerd Wallet’s independent evaluation which are independent of compensation.
Debt consolidation may be an option you’re considering in order to regain some solid footing, but it’s important to note how this move can impact your credit worthiness and score.