Debt consolidation allows to borrowers not only to build credit but to pay off credit faster at the same time. A debt consolidation loan allows for all or most debt to be paid with one monthly payment. Even with a higher interest rate, the amount saved in late fees incurred due to missing one of those many payments due each month typically more than makes up the difference.
The end result is that total debt is paid off in much less time. This allows not only for current debt to disappear faster, but on time payments on this type of loan consolidation have a positive effect on the credit score, allowing you to improve your credit. In addition, the unsecured personal loan option allows lenders without collateral or that do not meet traditional credit requirements to borrow money for emergencies, or to simply ward off being late on obligations, which can cause further damage their credit.
Making payments on the unsecured loan consolidation on time will improve credit as well, making this option another “double whammy” for a poor credit offered to customers. The belief is there is no need for bad credit to haunt someone forever if they are now able to handle payments and obligations in a way that would improve and maintain an acceptable credit score.