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islander1002

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Will a debt consolidation loan affect my credit score

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You will receive Hard Inquiries for the loan. You will reduce the "average age of accounts". You will add a loan with a full balance owed. All of these things will have a negative affect on your credit.

However, high credit card utilization can really put your scores down, so by reducing your credit card balances to zero, the improvement made here may outweigh the damage done from getting the loan. It is hard to say what would happen, it depends on your unique situation.

Is it worth it? Even if your scores get dinged, it may be worth it to save some $$$. Figure out how much you can save by doing this. If you do this, cut up the credit cards or you may find yourself in a worse situation by making this move.

Another thing to consider is a zero percent balance transfer card.

Of course your current credit and income will determine whether or not you can get a debt consolidation loan or a zero percent balance transfer card with a high enough limit to cover the transfers that you need to make.

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