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kreditkyle

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Does consolodating debt with a personal loan hurt credit score?
I have $5,500 in combined credit card debt with various interest rates and thinking of consolidating with a personal loan with around 17% APR for 36months (my credit isn't the best).

I already have a student and car loan (car loan only has $1000 remaining), would having another personal loan hurt my credit further?

If I consolidate, is it best to leave all the cards open, or cancel the highest interest ones?

Thank you!

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Top Contributor
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If you consolidate, you will see some reduction in your score.  Hard Inquiry, New Account, Lower age of accounts, although these will increase after 6-12 months.  Whatever you do, do NOT close those credit cards.   As long as they are open, they are positive.   If you don't use them, you will have very low utilization.   The problem in getting a loan to pay off credit card debt is that most people start using the credit cards again and find themselves in the same very position they were in when they got the consolidation loan.     It only makes sense to go for the 17% APR loan if that is lower than your current credit cards.    If you think you'll use the cards and don't have the discipline not to use them, then by all means get rid of most of them.  Yes, your score will drop, but at least in a year, you won't be $10,000 in debt as opposed to $5500

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