A common question that comes from many people is “Will Debt Consolidation Hurt My Credit?”.  The answer will vary depending on how you use the services but I’ll tell you right now that if you use the services the right way, you won’t have to worry about a thing.

Since most people that are in debt are worried about their credit score (and they should be), it’s not hard to imagine on why someone should be worried about their credit score.  I’ll show you how debt consolidation can hurt your credit and how it can help you.

How it can hurt your score…

You have to be careful on who you deal with when it comes to a debt consolidation company.  Some companies are shady while most of the are legit, it’s important that you do your research before you sign the dotted line with a company.  Sometimes, a debt consolidation company can do more harm than good with your previous debts.

A great way to check if a company is legit or not is simply by checking the Better Business Bureau’s website.  Here, they will tell you if they’ve had any negative reports.  Do that as well as do a Google search.  Usually, you’ll be able to tell if it’s a company you want to work with or not.

How it can help your score…

Let’s assume that you do find a company that helps your debt.  As long as you start paying those bills off on time, you’ll be able to improve that score.  Creditors want to see that you’re learning from your mistakes and you’re paying your bills off in full.  They would much rather see you pay them off no matter how you do it rather than declaring bankruptcy.

In the long run, debt consolidation will not hurt your score.  It’s only going to hurt it if you pay off all of your debts and you go back to how you lived before.  You have to learn from your mistakes and treat it as a life lesson.   You’re not the only one in life who has had debt, so don’t feel bad!  Do your research the right way and you will have a great credit score in no time.