In case you wonder if consolidating your debts can hurt your credit score – you’ll find this article useful. Let’s see. By itself, debt consolidation shouldn’t hurt your credit, in case if you have made your payments on time. If you have missed a couple of payments and then enroll in a debt consolidation and have a lower interest rate agreed with your creditors, then your credit score should improve, because the total amount of debt you owe will be lower. However, in case you apply with too many lenders at once, then those applications could hurt your credit score. Your credit history has the greatest influence on your credit score – how regularly have you been paying out your debts throughout your credit life (this fact occupies the whole lot of 35 percent in calculating your credit score). The other 30 percent goes to the amount you owe, so in case the debt consolidation lowers the total amount you owe, then it sure is a good thing. Another 15 percent is the period of how long have you had these debts, the types of credit (10 percent). The only way a debt consolidation may hurt your credit score is if it is added as a new debt.

The advice is not to get too stuck on the three digit number, because a perfect credit score won’t guarantee you any kind of loan, as much a s a low credit score doesn’t banish you forever from any kind of loans. Of course, it is important to try to keep your credit history clean, but don’t get hung on the score. It’s known for a fat that different creditors regard credit scores in different ways. You should be just fine in case you have a debt you can afford to pay out and make the payments on time.

However, if you consolidate debt in order to lower monthly payments and stretch out payments at higher interest rate – then you may have problems. Some debt consolidation agencies offer this option to their clients here and there, and people agree because they don’t understand that they only pile up bigger debts by doing so. The only thing the client cares about is a lower monthly payment.

So, beware of those debt consolidators, for they won’t help and can get you in a deeper debt hole.