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Some plans require you to become delinquent on your accounts in order to enter into the program.

Additionally, if the company managing your payments under your debt consolidation plan fails to make the payments on time, you are responsible, and those late payments may be reflected on your credit reports.

Plus, if the company convinces you to close all of your credit card accounts, it may negatively affect your utilization and you have no way to rebuild a rich history by using those cards in the future in a responsible way.

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Moving the balances of your credit card accounts into an installment loan for purposes of consolidation may cause a slight drop in your credit score.

The principal reason is you will have a new inquiry and huge installment loan appear on your credit report, even though you also will have much lower debt-to-credit ratios on your credit cards.You need a plan that brings your expenses in line with your income and one you will commit to follow.Without taking these positive money-management steps, consolidating your debt will not help your credit rating in the long run but could create the potential for disaster instead.In addition, your spending plan will help you determine if you can afford to consolidate your credit card debt.With your good credit rating, let's say you qualify for a personal loan at 10% interest.Have you started an emergency savings account of 6 to 12 months' worth of living expenses, so you won't have to use credit for unexpected expenses?

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