I'm not sure how this myth got started, but it's one of the most harmful myths out there. The worst thing you can do to destroy your credit score is to file bankruptcy. A chapter 7 bankruptcy stays on your credit report for 10 years and can reduce your credit score by as much as 265 points.

Credit counseling will not negatively impact your credit score unless you get tied up with a scam artist who says he'll pay your bills and doesn't. The current credit score formula set by FICO (the primary credit scoring company) ignores references to credit counseling, which means counseling doesn't help or hurt your credit score. A successful credit counseling program that reduces your debt will help your score.

Credit counselors can negotiate lower interest rates and work out payment plans with your creditors to help get you out of debt. If you do decide to work with a credit counselor be sure to sign up with a non profit counselor. The best way to find a good counselor is to use the resources of the National Foundation for Credit Counselors. On its website you will find information on what to expect from credit counseling and a tool for locating a credit counselor near you. Even if you don't think you're ready for a debt management program, a good credit counselor can help you get a handle on your debt.

Lita Epstein has written more than 20 books including the "Complete Idiot's Guide to Improving Your Credit Score."