Will a debt consolidation loan that is used to pay off credit card debt hurt my credit score?

Applying for a debt consolidation loan and using it to pay off your other accounts shouldn’t raise or lower your credit score significantly in the short term. While it does mean you’ve taken on new debt, credit agencies look at your credit history as a whole and will note that your other accounts have been paid off.

In the long term, if you make the payments on the new loan consistently for a year or two, it should ultimately improve your credit score.

Be careful, though, not to run up your credit card balances again. In that case, your credit score could fall because you’d have payments for both the debt consolidation loan and new credit card balances. Some lenders may see a debt consolidation loan as a sign that you have had difficulties handling your current debts.

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