Question: Is Debt Consolidation Bad For My Credit?

Will traditional debt consolidation hurt your credit? No. In a normal scenario, when you consolidate you're basically just borrowing money from a single lender at a better interest rate to pay off multiple high-interest loans. There's no delinquencies on the payments for the new loan, nor any payments made as of yet, so it would only show as a loan - with no positive or negative impact. Because it is a loan - it will show up on your credit report, but the debts you pay off will also be removed - so it all balances out.

If you're not currently keeping up with your payments but the lower interest from a consolidation loan will allow you to do so, consolidating will in fact improve your credit score as you start to keep up with your payments.

You may also be confusing consolidating your bills with debt settlement or negotiation, which does have some impact on your credit. The two are often confused, but with settlement your debts are actually negotiated with your creditors to lower amounts, a different process entirely (though they are often used in conjunction with one-another). Most debt settlement programs also address this with follow-up credit repair services.