Need advice--Debt consolidation/closing accounts

[Anonymous]

I was recently approved for $18,000 debt consolidation loan through my local credit union.  The only thing is they want to close all the accounts once they pay them off  so we're taling 7 or 8 accounts.  The highest card limit is $9000 which they would pay off and close and some of the other accounts I've had for at least 5 years.  I'm not sure if it's a good idea to close those accounts, wouldn't closing that many accounts have a significant negative impact on my credit score?  I understand the banks point of view in that if they pay the bills off and leave them open I could potentially go out and charge those accounts back up, but I'm not sure if it's worth doing a consolidation if I have to close all those accounts and have a negative hit to my credit.  Any advice?

[Creditaddict]

I would probably look at it from the point of view of how much money I was saving vs any score loss... but my bet is even if they close them, having just 1 balance vs 8 balances you will see a score jump.

You could always go back later and either try to re-open or open new accounts as you pay down the new loan.

[Wolf3]

It is probably saving you a lot of money, which is important.    Closing the accounts should not be a problem as long as you will have a few major cards left open.   Having no open accounts would be a problem. 

[USC08]

Would the consumer request to close the accout or would the bank(providing the loan) request the bank(credit card provider) to close it?

[haulingthescoreup]

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@Anonymous wrote:

I was recently approved for $18,000 debt consolidation loan through my local credit union.  The only thing is they want to close all the accounts once they pay them off  so we're taling 7 or 8 accounts.  The highest card limit is $9000 which they would pay off and close and some of the other accounts I've had for at least 5 years.  I'm not sure if it's a good idea to close those accounts, wouldn't closing that many accounts have a significant negative impact on my credit score?  I understand the banks point of view in that if they pay the bills off and leave them open I could potentially go out and charge those accounts back up, but I'm not sure if it's worth doing a consolidation if I have to close all those accounts and have a negative hit to my credit.  Any advice?

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Will you have any open cards left?

I can understand their thinking, but you need to keep at least one card open, ideally your oldest.

A member here just got a 60-70 point score jump for opening his first card, so that will give you an idea how important it is to have some revolving credit somewhere.

[Anonymous]

Thanks everyone for all of your advice.  It seems the consensus is to take the debt consolidation, I think that's the route I will take.  I will have a couple of accounts still open, but they aren't my oldest accounts.   Thank you again.