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This is a very good question and one that anybody who is planning to try debt consolidation should ask. The short answer to this question is that it will do both, but probably far more of the help than hurt. This is because a few things that consolidation companies do, while in your best interest, do have negative effects on credit scores.

For example, these companies use their debt experts to bargain down the amount of money that you have to pay on your bills. This means that even before the consolidation occurs, you already owe only a fraction of what you would have owed otherwise. This can be as low as only 50% of your previous debt. Unfortunately, however, these debts show up on your credit report as "settled," which new debtors take as meaning that you were unable to pay your entire debt. Therefore, you will take a strike on your credit, but that is nothing compared to what you would have otherwise, if you were to default on all of your debts.

Otherwise, there really isn't much negative about debt consolidation. Prior to 1999, many of the major credit agencies automatically counted using such a service against you in your credit report, but since 1999, that is no longer the case. Also, it many people forget that the single largest part of your credit score percentage-wise is the ratio of your debt to your annual income. Consolidation is just that: the consolidation of all of your debt into a single, easy monthly payment. Therefore, your ratio doesn't change, which means that your credit score will not change. Although, because you are now able to pay your debt off far easier than would have been possible otherwise, your credit rating will increase, possibly in a very dramatic manner.

Finally, there are situations where people get debt consolidation and there credit couldn't possibly be more shot. In this sort of situation, where you already have very poor credit, getting the services of a consolidation company could only help your credit; even going through the motions of showing some care for your financial situation will help your credit. Therefore, in many cases, getting these services will spike your credit score beyond just being able to easily pay off all of your bills and debts.

In a nutshell, by researching and then comparing not one but many debit consolidation services, consumers are able to select the service that meet your your very own financial situation, plus the cheaper interest rate available on the market. For example, read our latest debt consolidation company review: Review of Priority Debt Settlement.

Nevertheless, it's recommendable going with a trusted and reliable debt counselor before making any decision, this is the way you will save time through seasoned advise & cash by getting the best results in a short period of time.

H. Milla is editor of the Credit Card Debt Consolidation website – by visiting you can see his top rated debit consolidation service recommendation.

Find online debt consolidation resources and poor credit debit management advise respectively. We'll be glad to help you.

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Tags: Debt, debt consolidation, debt relief, debts