If you’re able to keep up with your loan payments, debt consolidation loans may actually help with your credit score. As you pay off your debt, you’ll reduce your debt-to-income ratio and demonstrate to creditors that you can make timely payments. Over time, this can boost your credit score.
On the other hand, the hard credit inquiry you take when applying for a new loan will hurt your credit score a little bit in the short term. If you miss payments on your new debt consolidation, your score will further decline.