The term debt consolidation sometimes gets a bad rap, but if done correctly, it can be a helpful strategy for paying off debts. When we talk about debt consolidation, we are not recommending debt consolidation loans which can lead to high interest rates and a longer payback period. Our recommended strategy is the use debt management programs which consolidates your debts into one payment at possible lower interest rates.
Many wonder how debt consolidation may affect their credit score. The short answer is that it could hurt your credit score in the short term, but be beneficial for your score in the long term. The NFCC details why this might happen. Read more.