Q. Will a bill consolidation loan hurt my credit score? We are bombarded with consolidation offers from Bank of America, Capital One, Sears and several other sources. They are personal loans that would allow us to receive a check and pay off our credit cards. The teaser rate is tempting. The default rate is horrific. But I believe we have the maturity to take the funds and utilize them for the exact purpose of debt reduction and not re-accumulate debt.

A.Craig Watts, a spokesman for Fair Isaac Corp., which owns the most widely-used credit scoring system, says the new debt will initially lower your score a little.

But if you follow through and use the money to wipe out your credit card debt, your score should actually improve after those payments are reported. He added that to keep your FICO score low you must make all your payments on time, but you would want to do this anyway to avoid what you describe as a horrific default rate.