When you consolidate your debt, you combine all those loans into one.
There are dozens of ways to do this, and some include transferring debt to a zero or low-interest credit card, taking out a debt consolidation loan, applying for a home equity loan or paying back your debt through a debt repayment plan.
(You can learn more about , which could lead to a lawsuit, the CFPB says.
Not paying creditors will also show up as a negative transaction on your credit report that makes it harder to borrow more money.
That’s because some may be debt settlement companies that convince you to stop paying your debts and “instead pay into a special account,” the CFPB warns.
“The company will then use this money to attempt to negotiate with creditors to reduce the amount of principal you pay off.” If you’re considering this option, try to speak with a nonprofit credit counselor first because debt settlement can put your credit in jeopardy.