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Question By
BibiThom

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consolidation and credit score
if I use a consolidation loan to consolidate credit cards and close the credit cards I'm consolidating, does that hurt my credit score?

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YES!

Helpful to 1 out of 2 people

Not that getting a loan and paying them off is bad. To the contrary, adding a personal loan to your profile will help in the long run.  It will show diversity in your Credit Report.  

But closing the Credit cards will.  That would lower your available credit and hurt your debt to credit ratio. The result is that when you do use a card, it will have a bigger impact on your score.  

My advise is to take the loan, Pay off the cards, Then lock those cards away in a safe or drawer. Consider them part of your emergency fund.  Only to be used when absolutely neccesary.  I suggest putting them in to a rotation, using only one card a month, then paying it off so you don't accrue interest. use a card at least once a year and The CC company won't close the account. People with the best credit scores generally have lots of available credit that they never use.

Good luck  

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