Consolidating debt hurt your credit

Paying Off Your Debts Quickly Enrolling in a Debt Management Program Consolidating Loans Avoiding Bad Options Community Q&A It’s possible to pay off debt without harming your credit.

With a debt-management plan, a consumer usually gets reduced interest rates, lower monthly payments, no more late fees and fewer calls and letters from creditors.When you enroll in a debt-management program, you write a monthly check to a credit-counseling agency and the agency pays your creditors.A debt-management plan usually lasts three or four years. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free. Ideally, that new debt has a lower interest rate than your existing debt, making payments more manageable or the payoff period shorter. We believe everyone should be able to make financial decisions with confidence. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. " Debt consolidation is a strategy to roll multiple old debts into a single new one.

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The more a creditor bases a lending decision on a consumer’s credit score, the less a consumer’s participation in a debt-management plan is likely to matter. If the agency administering the program misses or is late with a payment, it’s your credit record that gets marred.

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