Debt Consolidation Loan Impact on Credit Score

Debt Consolidation Loan Impact

Debt consolidation trade-off: -20 to -80 points short-term (hard inquiry + new account), +50 to +200 points long-term (utilization drop, new account age). Breakeven: 4-6 months typically. Strategic timing: consolidate when utilizing >50% across cards, interest rate reduction >3%, and no major purchases planned (mortgage/auto) for 6 months post-consolidation.

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*Short-term hit: 20-80 points | Long-term gain: 50-200 points | Breakeven timeline: 4-6 months | Interest savings: $2,000-8,000 annually*