Paying the Loan

• If you pay off the debt consolidation loan as agreed, particularly if you had been late on making payments when you had a number of different loans, your credit score will improve.
  
  

Closing Old Accounts

• If you close your old credit cards when you take out the consolidation loan, your credit score may suffer because your available credit, and therefore your debt-to-available credit, decreases. In addition, if you close your oldest accounts, your length of credit history can suffer.
  
  

Keeping Debt Low

• When people take out a debt consolidation loan they may spend more because their credit cards are no longer maxed out, according to Investopedia. This behavior hurts your credit score because of the additional debt you take on--and if you fail to repay it all, your score goes down even more.