Debt consolidation loans can also ding your credit. Applying for new credit will lower your credit score. Also, by rolling over your debts you are closing the old accounts, which will also affect your score. If the loan dictates that you negotiate a lower balance or “deficiency balance” with your creditors, you will harm your credit because you are asking the creditors to accept less than what you owe. This will be treated as a late payment on your credit score. Debt consolidation loans do not address the problem. Nearly 90% of the time people take out these types of loans, they don’t change the behavior that got them into debt and they turn right around and go back into debt.