The potential underwriting risk that you present to a new lender is measured in conjunction with your credit score and will now have to incorporate that you have the chance to begin adding to your credit card balances again.And the fact that many people do just that is why the action will temporarily cut your rating.For a list of all of our advertising partners, click here' With so many websites offering free financial tools, it can be hard to know whom to trust.At Nerd Wallet, we spend literally 1,000s of hours researching partner offers and following strict editorial integrity to match you with the perfect choice.A debt consolidation loan affects your credit score in a positive way.In fact, to credit agencies, paying off several accounts with the consolidation loan makes it seem as if you have paid off accounts.
A credit score is derived from items reported in your credit file.
), we recognize that our site does not feature every card company or card available on the market.
Additionally, our star ratings are a mix of user feedback and Nerd Wallet’s independent evaluation which are independent of compensation.
It uses a complex mathematical algorithm to come up with a score that predicts whether you are more or less likely to default on your next loan.
If you need help getting out of debt, you are not alone.