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Consolidation means that your various debts, whether they are credit card bills or loan payments, are rolled into one monthly payment. If you have multiple credit card accounts or loans, consolidation may be a way to simplify or lower payments. But, a debt consolidation loan does not erase your debt.

Here are eight ways to consolidate your debt: Debt management program. Credit card balance transfer. Personal loan. Peer-to-peer online lender. Home equity loan or line of credit. Retirement account loan. Borrowing from friends and family. Cash-out auto refinance.

Debt consolidation combining multiple debt balances into one new loan is likely to raise your credit scores over the long term if you use it to pay off debt. But it's possible you'll see a decline in your credit scores at first. That can be OK, as long as you make payments on time and don't rack up more debt.

Combining multiple outstanding debts into a single loan reduces the number of payments and interest rates you have to worry about. Consolidation can also improve your credit by reducing the chances of making a late paymentor missing a payment entirely.

Check if you can get a debt management plan (DMP) If you get a debt management plan you agree to pay off your debts with one monthly payment to a DMP provider. The DMP provider is an independent company. They'll deal with your creditors for you and make your payments.

The addition of a new account: If you're opening a new account to consolidate your debt, such as a balance transfer credit card or a personal loan, the new account will lower the average age of all of your accounts, which can negatively impact the length of your credit history.

Balance Transfers A balance transfer can be used to consolidate multiple balances into one credit card account. Part or all of your debt from other cards is moved to the balance transfer card. And you then make monthly payments to the new card going forward.