Debt consolidation loans can significantly improve your credit score, especially when high credit card balances are the main culprit for low scores. According to recent findings, consolidating credit card debt into a personal loan can lead to an average credit score increase of 18 points right at origination, with further improvements as the loan is paid off. For example, Seychelle Thomas, a credit card expert, saw her score jump from 717 to 801 in just a month after consolidating her debt. However, not all experts endorse this strategy, as some warn that it may not prevent future credit card overspending. The initial dip in credit scores due to hard inquiries and changes in credit utilization can be concerning for some borrowers. Ultimately, while debt consolidation can provide relief and a boost to your credit score, it’s crucial to address spending habits to ensure long-term financial health and avoid falling back into debt.
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