Does consolidating your credit cards affect your credit
When you take out a consolidation loan (either by opening a new line of credit to transfer balances into or opening a personal loan to pay off your debts), you usually use the maximum amount of money offered to you.
Some of those creditors may inform the credit bureaus that your account is being repaid in this way. S., disregards debt management plans when it compiles your score from your credit report.
FICO evaluates both the positive and negative information in your credit report before ascribing an overall score: 10 percent of your score relates to the types of credit you have in use, and 15 percent to the length of your credit history.
Having closed cards damages both of these allocations, as closed cards with zero balances fall off your credit report sooner than open cards.
Your credit score goes down if you charge close to the maximum amount of credit available to you.
So if you have two credit cards with a 0 limit and charge on each, your debt-to-credit ratio may be lower than if you have one credit card with a 0 limit and you charge 0 on that card.