I recently started with a credit-counseling service, which is helping me deal with three creditors that had increased my interest rates to 29 percent. When I informed the credit-card companies, however, I was told that credit counseling was as bad as filing bankruptcy. My current credit report shows no late payments and I am quite concerned.

It's too bad some creditors try to scare their clients away from credit counseling, which can be helpful if you're overwhelmed by debt and unable to make minimum payments on your cards. Reputable credit-counseling services can help you lower your interest payments and work out a plan to pay off what you owe.

It's true that some lenders view credit counseling in a negative light, but it's hardly "as bad as filing bankruptcy." Bankruptcy stays on your credit report for as long as 10 years and is universally viewed as a huge black mark by mainstream lenders.

By contrast, lenders have a wide range of views about credit counseling, with some viewing it as a positive and others seeing it as neutral.

The most widely used credit-scoring formula, for example, now ignores any reference to consumer credit-counseling that might be in your file.

The company that creates the score, Fair Isaac & Co., discovered three years ago that consumers who participate in the programs are at no higher risk of default than anyone else, according to spokesman Craig Watts.

Not all lenders use this score, of course, and some won't make loans to people who recently have been through credit counseling.

Because lenders react in different ways, credit counseling is probably best for people who can't work out reasonable payment plans with their creditors on their own.

People with generally good credit, for example, often can win a lower rate from their lenders simply by threatening to take their business someplace else.