If you are 60, 90, or even 180 days late on your credit card statements, and/or if your debt to credit ratio has hit above 50% (meaning that you have more debt than you have credit), then your credit score is, or will be, in dire straits.  Debt consolidation is something that may be able to help you.


Debt consolidation is the term used for taking all unsecured debt and turning it into one payment.  You can do this through a debt consolidation loan.  You may wish to use the equity you have built up in your home to consolidate your debt; or, finally, you may want to use a credit counseling service to enter a debt repayment plan.


Very simply, debt consolidation takes all your debt and consolidates it down into one smaller monthly payment.  It can even reduce your current interest rate.


The greatest risk to any type of debt reduction plan is what you decide to do with the money you save.


The biggest contributing factor to why debt consolidation, debt settlement or debt negotiation plans fail in America is because after the plan is in place many people feel a sense of financial freedom that they sometimes reward with a spending spree.


Then they repeat the cycle that got them in trouble in the first place, and more debt is created as a result.


Most debt consolidation companies will help you to plan a budget that meets your lifestyle so that you live within your means, but can still enjoy life.


Within that budget will include a payment to bring down your debt.  By learning to live within your means, the idea is that you won't end up in this situation again.


As for your credit score, if you are already 30, 60, or 180 days overdue on your credit card bills - any credit card bills - then the truth is that your credit is already damaged. So, any type of debt negotiation will not impact your credit score any further.


If you have a good credit payment history, but are in debt way more than what you have on your combined lines of credit, your credit score could already be damaged.


Furthermore, you need to be honest – you need to figure out which is more important to you: getting out of debt or a pristine credit score (if it's not already damaged).


A good debt consolidation company can help guide you to what is best for you to do.