Applying for a debt consolidation loan usually creates a hard search on your credit report, which may cause a temporary drop in your score. Taking the loan can also reduce the average age of your accounts and add new borrowing, but paying it on time could improve your payment history and help you manage credit card balances. Missed payments on either the new loan or remaining debts could damage your score significantly. Before applying, compare eligibility checks where available and consider free debt advice if you are struggling to keep up with repayments.