Can credit card debt consolidation help your credit? If you're having trouble making payments on time, you may find that debt consolidation makes it easy to raise your score.

Find out how credit card debt consolidation can improve your credit score.

Having a good credit score is important. It affects many parts of your life, beyond the interest rates that you pay. Your credit score can affect insurance rates, including car, home, and even health insurance. Although it doesn't exactly seem fair, having good credit can even determine whether you get the job that you are looking for or not. If you have too many credit cards, it may be difficult to keep track of them all. Although you might mean to pay them all on time, when you have too many bills, some of them might get lost in the shuffle. Late payments not only cost you money, but they can also ding up your credit. With credit card debt consolidation, you're only left with one debt. This one larger payment will be easier for you to remember to pay. Paying your debts on time will help your credit improve.

A (Temporary) Credit Setback

When you first get a debt consolidation loan, your credit score might see a temporary dip. Credit reporting agencies used to penalize "debt consolidation" loans because of their purpose to consolidate debt, but they don't do that today. Your credit score will dip temporarily because you are taking on new debt. This dip will not last very long.

As soon as you pay off your credit card debt with a consolidation loan, and you start making payments to your new consolidation loan on time, your credit score should go back up to where it was, because your debt will be reduced, your new credit becomes older, and you've shown that you have the ability to pay it. Continue to make payments on time, and your credit score should go up more.

Credit is Not Static

Your credit score is not a static number that stays constant. A lot of things can affect your credit score. If you want to improve your credit score, you can take action today to improve it. Paying your bills on time will help your credit score. Paying down your credit card debt will improve your score too, as part of your score depends upon your debt-to-credit ratio. Paying off any delinquent accounts will help your credit score, so be sure to include them in your consolidation loan, if you decide that it is the best move for you.

Credit Moves to Watch For

Although debt relief is a big reason why people get consolidation loans, it is important to do what you can to improve your credit score at the same time. Part of your credit score depends on the age of your credit, as well as what your debt-to-credit ratio is. Although you may be tempted to cancel every credit card that you own after credit card debt consolidation, that might not be the best thing for your credit. Try to keep one or two of your credit cards, as long as your lender doesn't oppose it. Keeping your oldest credit card, as well as the card with the highest available balance, will help keep your credit age up, and will help you improve your debt-to-credit ratio. You don't have to use any of your remaining cards; you can hide them in a drawer and forget about them. By keeping one or two open cards, you keep the age of your credit up, and you will have a great debt-to-credit ratio, as long as you don't ordinarily use the cards. Save the cards for emergencies, or use them to rent cars or stay at a hotel that requires you to have a credit card.

Late payments can severely hurt your credit score. If credit card debt consolidation helps you pay your debts on time, your credit score should turn around fairly quickly.

New debt can lower your credit score temporarily. If you're planning a major purchase like a car or a house, you may want to hold off on credit card debt consolidation.