Debt Consolidation › Does debt consolidation affect my credit score?

Does debt consolidation affect my credit score?

Applying involves a credit enquiry, which has a small short term effect. Over time, consolidating and then managing one repayment well, with the old accounts closed, can be positive for your credit profile.

Written by Ross McFarlane, Licensed Mortgage Broker (Credit Representative 526725). About the author

Why this matters

In the short term a single application leaves a minor mark, as any loan application does. The longer term picture is often better, because fewer open debts and a clean repayment record on one loan look healthier than several maxed cards. Closing the paid out accounts and not running them back up is what makes the difference.

The key points

Applying leaves a small, short term mark.
Managing one repayment well can help over time.
Fewer open debts can look healthier.
Closing the old accounts matters.

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Last reviewed: June 2026

General information only. This page provides general information about home loans and is not financial or credit advice, a quote, or a guarantee, and your personal circumstances have not been considered. Lending policies, interest rates, fees and eligibility vary by lender and change over time. Always confirm your own situation with a licensed mortgage broker or lender before acting. Ross McFarlane (Credit Representative 526725) is an authorised Credit Representative of Australian Associated Advisers Pty Ltd t/a Keylend, Australian Credit Licence 392169.