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The way debt consolidation affects credit depends on the various options to choose. If you consolidate by taking a consumer loan to pay off your credit cards, your utilization ratio could go down, causing your score to go up.

Unlike debt settlement, the fees for debt management are somewhat predictable. Usually you will pay a monthly fee of between $15 and $50 to the debt management company or government approved credit counseling agency that is in charge of your debt management plan.

If you're hopelessly drowning in debt, know that you can't negotiate any lower interest rates with your credit card companies or creditors, or if the math works out, a debt consolidation loan may be a good decision for you. If it may be a good time to strike, pay it all off, and walk away.

Debt consolidation stays on the credit report for the time than individual accounts are reported, i.e. seven years from the date that the account was settled.

If you go to a bank to consolidate loans, they will check your credit score. If your score is too low, the bank most likely will turn down your loan application. Another option for debt consolidation with bad credit is peer-to-peer lending.

Getting a debt consolidation loan when you have bad credit can be tough, especially if you seek help from the wrong source. While your bank or credit union may offer various consumer loans for debt consolidation, it's possible you won't qualify if you have blemished credit.