Will debt consolidation affect my credit score?

Debt consolidation may have an impact on your credit score, but the extent will vary depending on your specific situation. In the short term, consolidating your debts may cause a slight decrease in your credit score due to the new credit inquiry and potential closing of previous credit accounts. However, over time, debt consolidation can potentially improve your credit score if managed properly. By making regular, on-time payments towards your consolidated debt, you can demonstrate responsible credit behavior, which positively affects your score. Additionally, eliminating high-interest debts through consolidation can free up available credit, resulting in a lower credit utilization ratio, another factor that influences your credit score. It's crucial to choose a reputable debt consolidation service and consistently make payments to minimize any potential negative impact on your credit score.