Does using a debt consolidation service hurt your credit?

Using a debt consolidation service can have both good and bad effects on your credit. While consolidating your debts, you may close down your accounts. This can hurt your credit. When you close an account, your available credit lowers, and the credit utilization ratio goes up. This hurts your credit score. Now, if the debt consolidation service helps you to take out a loan to pay off your debt, your credit won't be hurt.

Yes, taking out a new loan can hurt your score by some points, but as you pay down your debts, your credit will gradually improve.