woman cutting up credit cards

If done correctly, debt consolidation can be an effective strategy for paying off debts. While we do not recommend debt consolidation loans which usually have high interest rates and a longer payback period, a debt management plan can be useful in paying off debt. Debt management programs work to consolidate your debt into one payment at possible lower interest rates.

Any debt management efforts can affect your credit score and while they may hurt your score in the short term, it will be beneficial in the long term. In a recent blog post, the NFCC identifies why this might happen and how it might affect your credit score. Read more.


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