Some people are having second thoughts when it comes to debt consolidation. They think it will cause huge damage in their credit history? Is there a truth in this? Will deb consolidation hurt your personal credit history?Debt Consolidation in Your Credit ReportOnce you apply for debt consolidation, it will be recorded in your credit report. Will this have a bad effect on your credit rating? Initially, it would be easy to feel the impact of consolidation. Naturally, lenders may have a negative impression to your repayment capability as a borrower since your past records show that you’ve struggled with debt repayment.While a debt consolidation in process, you may not have the liberty of applying for new loans or even new credit cards. Nevertheless, the negative effect that consolidation may have on your credit rating is only temporary. Once you have paid off all your debts with other creditors, you can focus on paying off your debt consolidation loan until you achieve complete debt recovery.The advantage of consolidating debts with a loan is that you can immediately put a stop to further debt accumulation. Remember that each of your creditors will be imposing its own interest rate on your debts. When you sum up the additional costs on interest rates alone, it would be easy to see how you can save a great deal of money by combining all your debts to a single loan.Aside from paying only one rate of interest, the best debt consolidation companies offer lower interest rates so your monthly debt repayment can be greatly reduced. However, because of the longer repayment period, your debt consolidation company can still profit from the loan.Use Your Debt Consolidation Loan to Rebuild Bad CreditThe good news is you can use your debt consolidation loan to rebuild your bad credit history. Yes, although your credit history may be hurt, you can use consolidation to regain a good credit standing. How?By submitting your monthly loan payments on time and by keeping away from new debts outside consolidation. Remember that your priority is to complete your loan payments at the soonest possible time so you’ll want to avoid extra bills which can add burden to your obligation.Do you own a credit card? If you do, avoid charging purchases that would be difficult for you to pay off in full. Learn from your past mistakes. Always keep in mind high interests goes with having credit cards and that means you can have huge debt all over again. If you must use your credit card, make sure that you can avoid the additional interest rate costs by paying in full and on time.Also, you have to know that consolidation loans are secured by collateral. Make sure that you don’t fail in completing your consolidation payments for it might cause you your home or property. True, consolidating debts require hard work on the part of the borrower but rest assured all your efforts will pay off as soon as you complete your loan’s term.Copyright (c) 2009 Suzy Vanstrusen