Have you seen those ads that push you to get a supposedly free credit report? The catch is that they also enroll you in a subscription service where you pay as much as $200/annually to have your credit monitored!

Under federal law, you are allowed one free credit report every year from each of the three main credit-reporting agencies -- Equifax, Experian and TransUnion. Additional copies are available if your identity is compromised. Visit AnnualCreditReport.com to get your free credit reports. No strings attached!

Meanwhile, you can also get a free non-FICO credit score from Quizzle.com, CreditKarma.com or Credit.com. These services will try to sell you certain mortgage and financial services, but you can decline their pitches and get free access to your score.

One nuance that's important to understand: Each credit bureau's report will contain three credit scores. For example, if you get your Experian report, it will have a made-up score; the true FICO score used by most lenders; and a Vantage score.

So there is no single credit score for people. What's important is to know where you rank on a scale as a credit risk compared to other people.

More than a year ago, doing a credit freeze was a very popular topic on our show. However, Clark recently received several calls from listeners that indicated people are still unfamiliar with the basics of a credit freeze.

A credit freeze is, in essence, the cheapest insurance policy there's ever been against economic identity theft.

You can ignore those ads you see for both the wholly legitimate LifeLock and those sleazoids at FreeCreditReport. That's like going into battle without enough weapons. A credit freeze, however, is the ultimate weapon -- even if a criminal manages to get hold of your sensitive financial information.

Recently, Clark had a situation where he was out of town and somebody wanted his mail. He had a locking mailbox, but the criminal took a hammer or crowbar to it and beat it open! Even though the criminal made off with account numbers, the Howards have not suffered true economic identity theft because they had their credit freezes in place.

A credit freeze basically locks down your credit and prevents anyone from opening new lines of credit as if they were you. Credit freezes can be done online with each of the three main credit bureaus for a cost of anywhere from zero dollars to $10 depending on your age and/or other circumstances.

Once your credit freeze is in place, you receive a secret code that only you know. That's the part that prevents criminals from breaching your credit -- even if they know your Social Security number, mother's maiden name and other identifying info.

You can use your secret code to temporarily thaw your credit anytime for a nominal fee.

More and more employers are weighing job candidates based on their credit report -- even though it's no indicator of what kind of employee someone will be!

This is a practice that started and should have ended with bank tellers and cashiers at retail stores -- basically, people who touch money every day. But now so many businesses check credit reports without thinking it through. In fact, your application often gives them permission to pull your credit.

The real problem is that many credit reports have errors. Public Interest Research Group estimates that close to one-third of reports contain serious errors that can cost you a job offer or prevent you from getting new credit.

This is yet another reason why you should visit AnnualCreditReport.com to pull one of your three credit reports every four months. Remember, you have a credit report from each of the three main credit bureaus -- Equifax, Experian and TransUnion.

Paying off any small nagging debts will immediately help your credit. But if you have errors, be sure to challenge them. When you challenge an error, it temporarily removes it for 30 days. Contact the alleged creditor by phone and in writing to dispute the debt. They're liable for putting false info on your report if you can demonstrate financial harm, such as the loss of a job offer.

Clark is often asked how a short sale or foreclosure will impact someone's credit score. A new report from syndicated writer Kenneth Harney now reveals the damage.

Before we go further, please note that these figures below are compiled based on your Vantage credit score. The Vantage score is a fake score manufactured by the three main credit bureaus -- Equifax, Experian and TransUnion. It is not the official score used by most lenders. Yet it still give you a good indication of what to expect with your true credit score.

• A short sale will ding your credit score by 120-130 points.
• A foreclosure will drop your score by 140-150 points.
• Bankruptcy can decimate your credit score by 365 points.

When you do a short sale, the lender agrees to let you sell your property for below market value and everyone walks away, essentially with almost no harm, no foul. But if you go into foreclosure, the lender has the right to sue you for deficiency. That means you're responsible for whatever financial losses they suffer as a result of the foreclosure.

And that can lead you to bankruptcy, which will remain on your file for 10 years.

As if credit scores weren't already complicated enough, FICO is about to throw another curveball at consumers.

The Fair Isaac people have unveiled a new official FICO score called FICO 08. This was supposed to become the industry about a year and a half ago…and it's not really there yet, according to Clark. Some lenders may continue to use the traditional FICO score. But over time, FICO 08 will take precedence as the score of choice.

So here's what you need to know: FICO 08 still retains the 300-850 scoring range of the traditional FICO score. But there are some important new differences.

Under the new FICO 08 score, a single late pay will have virtually zero impact on you. Under the old model, one late pay could have demolished your score. Another note of importance: The more of your available credit you use under the FICO 08 model, the worse your score will be.

Clark knows it's easy to get confused, so just remember these key rules when it comes to your official credit score:

• Continue to pay every bill on time every month.
• Use as little of your available credit as possible.

Have you noticed that listener calls to the show about ID theft have dropped off versus a year ago? Christa speculates it's because people don't have as much credit to steal anymore!

Clark would like to believe the drop in calls is because his listeners have embraced his advice and frozen their credit. But he knows better! So a few word about the virtues of a credit freeze are in order.

When you put a freeze in place, it does not affect your current use of credit. You are simply issued a secret PIN from each credit bureau that prevents a criminal from opening up new lines of credit in your name -- even if they steal your identity.

The PIN can also be used to temporarily "thaw" your credit so that legitimate applications for credit and services can be processed.

The cost to freeze your credit ranges from free to $10 per bureau, depending on your state. So when you multiply that by 3 credit bureaus, you could pay anywhere from zero to $30 in total.

Victims of identity theft can have any fees waived, and seniors are often exempt from the fees in most states.

People often wonder why the credit bureaus aren't more gung-ho about people freezing their credit. After all, they do make money from the process. But it turns out that the money they make is puny to them. They'd prefer to make the big bucks by creating a dossier on you that they can later sell.

When you freeze your credit, however, the credit bureaus can't sell your info anymore.

The FTC has filed suit against a number of credit repair groups for violation of the Credit Repair Organization Act. You know the usual suspects…you see their ads on the Internet, on TV and in your inbox as spam. Beware of those promises to erase bankruptcy and magically raise your credit score.

Unfortunately, under current law, these scamsters are only subject to a slap on the wrist. There's no possibility of jail time for what they do. So they go away when reprimanded and then set up shop under a different name.

There is no magic wand for credit repair. You fix your credit by paying your bills on time. It really is that simple. Some 35% of your credit score reflects your timely payments each month, while another 30% has to do with reducing the amount of debt you owe vs. your line of available credit. That's a combined 65% right there.

Meanwhile, the FTC recently poked fun at the FreeCreditReport people with a spoof ad available at FTC.gov. As always, Clark wants to remind you that AnnualCreditReport.com is the only legitimate site to get your free credit reports once per year.

In fact, Clark has a new mantra he'd like you to repeat: FreeCreditReport is NOT free, FreeCreditReport is NOT free, FreeCreditReport is NOT free!

Lastly, Quizzle.com, CreditKarma.com and Credit.com all offer free credit scores. (Editor's note: The scores offered by these 3 services are not the official FICO score, but rather an approximation of it.)

Credit scores used to be a tightly controlled secret. That guardedness allowed some lenders to take advantage of African Americans especially with higher rates of interest when they would go for loans. But the new democratization of credit scores means shame on you if you don't know what's going on with your credit and your credit score.

Clark suggests using Quizzle.com, CreditKarma.com or Credit.com to get your free credit score. (Editor's note: The scores offered by these 3 services are not the official FICO score, but rather an approximation of it.)

Interestingly, Clark can no longer get his free credit score. Why? It's an unintended consequence of his beloved credit freeze!

And, remember, the only place to get your free credit report once a year is AnnualCreditReport.com. Accept no imitations!

Listeners who have frozen their credit often ask us if that will affect their ability to access their credit report. TransUnion and Experian say you won't have trouble doing so. Equifax, however, says you will need to provide additional documentation to prove who you are.

Meanwhile, Quizzle.com, CreditKarma.com and Credit.com all unanimously say you may have trouble accessing your free credit score from them if your credit is frozen.

CreditKarma.com hopes to have this problem solved in the next several weeks. Meanwhile, the website also has launched a credit simulator tool that lets you see, for example, how not paying a bill one month will affect your credit score.

On a related note, we've received questions about a variety of scenarios involving your credit score. Our senior producer Kim did some research with Fair Isaac and Clark wants to share the results with you.

In one scenario, a caller told us that a credit inquiry was run by a car dealership -- even though he was buying a car in cash! Fair Isaac confirms that when you go to buy a car, your credit may be run behind your back. This is permissible activity when you enter into the purchasing process -- even if you're paying cash!

Another caller was a victim of ID theft. The ID theft had been resolved, but the criminals tried to take out credit in the caller's name and those inquires lowered her credit score. Fair Isaac tells us that victims can dispute such fraudulent items with the individual credit bureau. In theory, the bureau is supposed to remove those inquiries from your report and there should be no impact to your credit score.

Finally, a third caller's bank accidentally opened a credit card in her name. The account was closed, but the incident lowered her credit score. Fair Isaac reports that when the bank makes an error like this, the bank is the one that must petition the credit bureaus to delete the inquiry from your credit report.

With the high rates of credit card default, the banks are in a panic trying to close down stale credit card accounts that haven't been used in 24 months. That's a double whammy to you: It reduces your available credit and the length of the history of your credit. Both criteria can really hurt your overall credit score.

So the key is to use all your credit cards twice a year. Simply mark a day on your calendar, make a small purchase of $5 or less and then turn around and pay it right off. This keeps your account active and raises your credit score, plus it helps make it less likely that your account will be closed.

In related news, the banks are also redlining by shutting down accounts based on zip code. This practice is illegal -- though no one seems to be stopping it. The banks must justify for your individual situation why they're closing your line or reducing it.

The bottom-line is this: It's important to have more -- rather than less -- lines of credit right now. Have a backup card if your main one gets shut down.

Clark has a trio of exciting developments to share. First off, Verizon is doing away with contracts under certain conditions. Let's face it, contracts are for cowards. Carriers had to default to them because of the industry's spotty record of customer service. It was their way of preventing you from fleeing.

So here's Verizon's deal: If you already have a phone, you won't have to get locked into a contract. You'll only need a contract if you want Verizon to provide you with a subsidized phone when you sign on as a customer.

Clark applauds Verizon's move and hopes it will prompt the other 3 carriers to eliminate contracts too -- unless you're getting a subsidized phone.

The second development involves T-Mobile's introduction of the G1 -- the first phone based on Google's Android platform. It is essentially a cellular computer that looks like a little mini-computer with both a keyboard and an iPhone-like touch screen.

Finally, the last exciting development involves your credit. Doing a credit freeze online through TransUnion is now completely FREE -- even if your state normally requires a fee! Clark has no idea why they're doing this, but he's happy that they are. (Editor's note: TransUnion began charging for their credit freezes, effective July 24, 2009.)

People often wonder what Clark thinks of the "no, no, no" plans -- where there's no payment, no interest and no down-payment for a certain number of years. The penny-pinching guru originally thought the danger was limited to such plans encouraging people to buy things they can't afford.

But The Chicago Tribune now reports that the "no, no, no" plans can demolish your credit score. Take out a few of them and the cumulative effect will take a toll. You may find you'll get higher interest rates when insurers check credit scores or even lose job offers if employers check scores.

Meanwhile, Fair Isaac -- the company that compiles the FICO score -- is changing the way it handles authorized user account status. The organization was seeking to eliminate all authorized user credit standing across the board, -- but they've now rethought that approach.

Fair Isaac was initially upset that some criminals figured out how to exploit the idea of being an authorized user. Basically, they generated inflated credit scores for risky candidates by "renting" someone else's good credit. But now Fair Isaac instead developed a new fraud detection method to block the renters and still generate credit scores for those who rightfully get authorized user status from a loved one.

One caveat here, though -- don't give authorized user status to a boyfriend or girlfriend as a way to improve a relationship. If they charge up your card and end the relationship, you're stuck with the bill and the ruined credit (not to mention a broken heart).

Clark thinks its a rotten game that credit card companies play: They lure you in, get you drunk on plastic with low interest rates, and then once they see you've got a big balance going, they say, "We were just kidding! Your interest rate is now 17%!" Clark has even seen it go as high as 39%. Under current federal regulations, a bank is allowed to raise your interest rates on previous purchases with only 15 days notice. There's been so much uproar about it around the country, that after great delay and much legislation, the Fed and other agencies have issued some proposed rules for the credit card industry. Instead of 15 days notice, you'd get 45. Another new rule is that a bank would be free to raise interest rates on future purchases, but on any balances that already exist, the interest rate you purchased under would apply. The banks are going crazy, because these rules would destroy their ability to cheat you. But that's what Clark thinks the banks are doing, which is nothing short of slimy. When the Fed issued these regulations, they got over 60,000 comments from bank lobbyists--usually they only get a couple hundred at most. The head of the Office of the Controller of Currency even took it upon himself to plead the case for the banks. Clark really wishes he could get him to come on the show so Clark can ask him why he wants to stab the American peope in the back. One of the arguments the Controller makes is that by issuing these rules, there might be less credit made available to the people. Clark says: "As if the American people need more credit!" Spending money we don't have is how we've made our position weaker in the world. If banks can't lend money to people because they can't rip off the customers in the end... so what? That said, it's a free market. If someone says they want to lend money at 35%, that's their right. But if they promise a 7% rate, they shouldn't be able to raise it after the fact. This whole issue has Clark really steamed.

Experian and TransUnion now allow residents of all 50 states to freeze their credit online. With Experian, it takes about 90 seconds. With TransUnion, 3 minutes. Want to find out how to do it? Follow the bolded links on Clark's guide!

So what's going on with Equifax? Currently, only residents of 4 states -- Georgia, Iowa, New Jersey and Wyoming -- can freeze their credit online. Those are the 4 states that are required by law to allow their residents the online option. But by Nov. 1, Equifax expects to make the online option available to residents of all other states too.

Please note that while a credit freeze can help shut down economic ID theft, it will not help eliminate criminal identity theft. That's where crooks use a fake ID with your information.

In order to tackle criminal identity theft, local law enforcement will have to move to electronic fingerprinting and/or iris reading to make sure a suspect is who he or she claims to be.

Little by little, we are getting the tools we need to stop ID theft. It's only been more than a decade coming! Clark recalls that it all started with a couple named the Foleys in San Diego who founded the ID Theft Resource Center after it happened to them.

There's a new trend that you need to know about if you have a home equity line of credit. Buried in your HELOC is a clause that allows the bank to freeze or reduce your line, at will, with almost no notice. In his TV work, Clark recently did a story about Bank of America doing this to its HELOC holders. But many banks other than just BoA are doing this.

This is a double whammy because many banks charged fees upfront to set up the HELOCs. So far they're not refunding the junk fees. Meanwhile, your credit score can also be demolished based on utilization of the HELOC. Say you have a HELOC with a $100K limit and you're only using $30K. That means you're using 30% of the limit, which is a relatively low level. But if your HELOC is suddenly dropped to a $30K limit, then you're using 100% of what's available to you and your credit is buckling under that strain.

Banks are slashing HELOCs because people are increasingly defaulting on them. Yet people with solid credit can get fantastic offers for borrowing right now because it's such an odd time in our economy. Clark's credit union is offering a 5-year fixed rate HELOC at 3.95%. That's really inexpensive! He also has access to car loans at 3.90% for new or used vehicles on loans of 4 years or less. There's such a stark contrast between what's available to people with good credit and people with bad credit.

In the aftermath of the housing meltdown, there's been a lot of fingers pointing at Fair Isaac. Lenders have been griping that the supposedly all-important FICO credit score has failed to accurately predict the possibility of default on loans of various types. So there are new initiatives in the works to come up with better ways to figure out who's going to pay and who's going to skip out. Dow Jones Newswires reported that the new models involve looking at bounced checks, utility bill history and the ability to pay your rent in a timely manner. It turns out there's a very real correlation between bouncing checks and default on loans.

Clark previously told you about the trend of people with no traditional credit benefiting from "expanded scoring" models. But this latest wrinkle is where even if you have traditional credit, other things are still being brought into the mix to give a better overall picture of your financial health. So if you're in your 20s and bouncing checks, you've got to realize that kind of behavior can really harm you. Your reputation is on the line.

Many of us have what are called -- in credit card lingo -- "back of the wallets." These are the cards we hardly ever use that may be buried somewhere in our wallets or in a drawer at home.

The typical American has about a dozen cards, but only 2 that are used frequently. The rest of those cards are ignored until they go dormant. In fact, you may not even activate the new card when you get it in the mail.

Banks used to just let these dormant accounts sit and hope you'd someday use the card again -- but not anymore. Now if an account goes stale, they'll close that account. That hurts your credit score and limits your access to funds.

So you may want to consider using your "back of the wallets" twice a year about 6 months apart. Charge a nominal amount and then pay it off. That will keep these accounts current in your credit mix and raise your credit score.

This is not just a silly assignment. You'll be helping your score, which is very important in getting lower interest rates, securing job offers and more.

There was only a smattering of news recently about TransUnion losing a lawsuit over illegally selling personal info. As part of the settlement, the credit bureau will be required to give you free access to your credit score and other info for half a year. This decision will affect 160 million people.

Traditionally, people have had to pay for their credit scores. If this TransUnion settlement happened a year ago, Clark would have made a big deal about it. But there a couple of reasons why it doesn't matter as much today.

First, there's the government-sanctioned AnnualCreditReport.com that allows you to get your credit report once a year for nada. Second, there are already a number of ways to get your credit score for free.

Some credit card operators, such as Washington Mutual, will give you your Fair Isaac score every month as part of their marketing efforts. (Editor's note: WaMu is discontinuing this practice effective March 1, 2009.)

You can also use Quizzle.com to get your Experian credit score for free. Other free sites to try include CreditKarma.com and Credit.com.

These 3 "dot coms" all give it away in the hopes that you'll buy the products and services they're trying to market. But there's no obligation to buy anything at all. (Editor's note: Quizzle.com is owned by Quicken Loans.)

Why should you care about your credit standing? Even if you don't need any credit, a mistake on your report or score will trigger higher insurance rates. You could also be turned down for a job. So check it out!

Thanks to Clark's efforts, many people know that you can obtain your free credit report at AnnualCreditReport.com. Don't go to FreeCreditReport.com. They may have great jingles, but you should avoid them like the plague!

Now several websites will also give you your credit score for free -- in the hopes that you'll buy other products and services they're pushing. Of course, there's no obligation to buy anything.

Quizzle.com is one site that Clark used to get his Experian score. Please note that this score is different than the official FICO score. (Editor's note: Quizzle.com is owned by Quicken Loans.)

A couple of other free competitors that Clark hasn't tried out yet include CreditKarma.com and Credit.com.

In the aftermath of the housing meltdown, there's been a lot fingers pointing at Fair Isaac. Lenders have been griping that the supposedly all-important FICO credit score has failed to accurately predict the possibility of default on loans of various types. So there are new initiatives in the works to come up with better ways to figure out who's going to pay and who's going to skip out. Dow Jones Newswires reported that the new models involve looking at bounced checks, utility bill history and the ability to pay your rent in a timely manner. It turns out there's a very real correlation between bouncing checks and default on loans.

Clark previously told you about the trend of people with no traditional credit benefiting from "expanded scoring" models. But this latest wrinkle is where even if you have traditional credit, other things are still being brought into the mix to give a better overall picture of your financial health. So if you're in your 20s and bouncing checks, you've got to realize that kind of behavior can really harm you. Your reputation is on the line.

Years ago, Clark did an experiment to see if banks purposely hold credit card payments to trigger late fees and ruin your credit. So for 8 months, he sent in his payments by overnight express mail shortly before they were due. During that entire time, the company posted his payments anywhere from 4-9 days after they had been received. When Clark called customer-no-service for an explanation, the representative blamed the U.S. Postal Service. He escalated his complaint to media relations and got a response of no comment. That alone speaks volumes.

Fair Isaac -- the originator of the FICO score -- knows that the banks are playing dirty pool. So Fair Isaac is looking at revising its credit scoring model by the spring. Previously, a late pay on your credit report would demolish your FICO score. Under the revision, an occasional late pay will not harm your score, but a pattern of late payments will destroy it. Also, applying for instant store credit won't take the bite out of your credit score that it once did. However, being an authorized user on an account will no longer help your credit score and may hurt it going forward.

What you don't know about your credit report can hurt you. But what can really hurt you even more is when you report errors to the credit bureaus and they don't care to update them. Accuracy costs money; the bureaus are only too happy to sell somewhat accurate reports. More than 1 in 4 people have errors on their reports that can lead to higher interest rates, denial of a job and worse. A Florida woman recently sued Equifax because her file was married with someone else's who had bad credit. She repeatedly provided documentation to clear her name. Equifax refused to do anything about it and the company's negligence cost the woman $220,000. When the case went to trial, the jury awarded the woman $2.9 million! Equifax has vowed to appeal, according to The Orlando Sentinel.

Clark says that the laws governing the bureaus don't have enough teeth in them. People should not have to go to the mat and fight repeatedly to get their credit cleared. The problem is that these bureaus are not focused on you and me; they just want to deliver higher value to shareholders. So they won't be accurate unless they're required by law. The sad truth is that there is no way to force bureaus to be accurate -- short of the Florida woman's method. Clark hopes the bureaus get knocked around in the courts so much that their bottom line is damaged and they're forced to change their ways.

Clark has taken about 8 calls over the last several months that he thought were UFO questions with no connection to each other. People have been telling Clark they're getting harassed by collectors over debts that were wiped away when they filed for bankruptcy, or that debts that had been thrown out in bankruptcy court are showing up on credit reports as outstanding. Then Clark read Business Week's recent cover story "Prisoners of Debt" and it all made sense: Certain banks, collection agencies and credit bureaus are working together to undermine existing bankruptcy laws. When you file for Chapter 7, you get a bad mark on your record for 10 years. The tradeoff is that you also get to wipe out any credit card debts clean and clear. You usually first go through an evaluation process to see if you should pay a portion of your debts back under Chapter 13. Today you can only do Chapter 7 if your situation is hopeless.

Business Week discovered that Capital One, Bank of America, Chase and Discover are ignoring these bankruptcy laws -- by accident or on purpose -- and illegally selling debts to collection agencies so they can go after you. This flouts the law of the land, whether you agree with it or not. When a Chase lawyer was questioned by a judge about why they've sold bankrupt debts, the lawyer replied that it happens all the time. The Business Week article says the banks claim this is all an unintentional mistake. But there's a clear pattern here: First the lenders fail to wipe out the debt when you file for bankruptcy. Then they sell it off to collectors and score some cash. Next the collectors try to illegally collect the money. Finally, the credit bureaus act as co-conspirators by listing debts on your report that aren't valid. So if you've filed for bankruptcy and are caught in this vicious circle, contact the banks and bureaus by phone and in writing. Try getting them to update the status of your legally expired debts. If that doesn't work, go back to the bankruptcy court where you filed and talk to the judge.

A few days ago Clark told you that TransUnion and Equifax will begin allowing people who don't live in states with credit freeze laws greater access to freezes for a price. Experian has now announced that they too will modify their credit freeze rules in the same way. Credit freeze laws started in California and are now in 39 states on the way to being in all 50. But surprisingly only about 50,000 people across the country have taken credit freeze action. Experian's offer begins Nov. 1 and will cost $10 just like TransUnion and Equifax. So if you want to freeze (or unfreeze) your credit with all three bureaus it will cost $30. Keep in mind that this service is completely free those who are already victims of ID theft and have a police report or FTC affidavit to prove it.

What is a credit freeze and why is it so important? Criminals have access to your ID so many ways. Freezes allow you to lock up your records and select a secret code that only you know and can use to temporarily thaw your credit. So criminals won't be able to get credit in your name because they don't have your code. This is the most effective tool against economic ID theft and it's a shame that so few people have used it so far. Even Clark plans to do a credit freeze now that it's available to him in Georgia. After all, ID theft happens to 10 million people each year.

There's good news for consumers who don't live in one of the nearly 40 states with credit-freeze laws on the books. TransUnion and Equifax have now agreed to allow non-victims of ID theft in such states to freeze their credit for a cost of $10 beginning Oct. 15. If that cost seems high to you, just think about how expensive it is to be a victim of ID theft. Of course, freezes already are free to those who've filed a police or FTC report about having their ID stolen. The benefit of a credit freeze is that even if a thief has your information they can't do anything with it. There's no word yet if Experian -- the third major credit bureau -- will follow the lead of TransUnion and Equifax and allows credit freezes in states where it's not already on the books. Experian just lost a lawsuit on appeal that concerned negligence in its credit reporting practices. The bureau has messed someone's credit up and had a false judgment against them. But it still wasn't corrected even when the person had documents to prove that Experian made an error. The three credit bureaus wield so much power. Their reports determine if we get credit, job offers and loans. They should be held accountable for accuracy, but unfortunately this is not yet the case.

For the last few years, Clark has trashed Capital One -- one of the nation's largest credit card issuers and the purveyors of those memorable "What's in Your Wallet?" commercials that people either love or hate. Well, today the company gets some praise from Clark because it's agreed to change a policy about how it reports your information to the credit bureaus. In the past, Capital One would not report how much of your credit limit you were using. That way it always looked like you maxed out 100 percent of your credit, effectively destroying your score. According to Clark, this was an intentional move on Capital One's part because they wanted to hurt your credit and prevent other companies from poaching their customers.

Now the company has agreed to report credit limits to the bureaus. So some Capital One customers will have big score boosts and be eligible for better auto insurance rates, homeowner's insurances rates, mortgages and more. Capital One's change is huge because 30 percent of your credit score is based on how much credit debt you're carrying versus how much credit is available to you. So someone who has a card with a $5,000 limit and uses only $1,000 (20 percent usage) has a higher score than someone who has a card with a $20,000 credit limit and uses $15,000 (75 percent usage). Also it's important to know that when you change credit card companies you shouldn't close your old account. You need to keep it open -- even if you don't plan to use the card -- so that you can get a higher credit score.

One crooked employee at Fidelity National Information Services stole the personal information from 2.3 million Americans, taking their checking account numbers, social security numbers, and more. He has since sold the information to a "broker." This is a big deal, because if someone gets your checking account number, unlike your credit card number, you could end up behind bars when the criminal writes checks pretending to be you. Criminals are able to steal information easily. You never know that they have it until it’s too late, and it's almost impossible to know where the breach in security originated. In 37 states, you can freeze your credit file so that if someone does steal your identity, there's nothing they can do with it. It's very beneficial, but credit bureaus are keeping this secret. This is because they lose all the money they make from your dossier if you freeze your credit. Clark thinks we need a fining system in place for credit card companies, banks, and lenders so that they are held responsible when something goes wrong and they give credit to the wrong person. You can check if your state has credit freezes at financialprivacynow.org

Credit bureaus have been getting a lot of heat on Capitol Hill because it's way too difficult for consumers to fix errors on a credit report. The Federal Reserve is also on the hot seat after it was supposed to have issued rules four year ago detailing how to correct such errors. But the Reserve hasn't issued those rules because it's in cahoots with the banks. The last thing the banks want to do is lose money if you can fix errors on your credit report. Think about it: The banks and insurance companies have an advantage when you have errors on your report. You'll get a lower credit score and they can give you higher price quotes on loans and insurance coverage. We're talking here about an industry that is verging on being almost purposely dishonest.

USA Today recently did a story on how the major credit bureaus lobby state lawmakers to block credit freeze laws. Such laws allow consumers to put a hold on their accounts after their identities have been stolen. Thankfully, more than 30 states now have credit freeze laws despite the bureaus' best efforts. Now the bureaus even want Congress to outlaw all existing credit freeze laws. This is about money, plain and simple. Every time a freeze happens, that means the bureaus can't profit off the dossiers they collect of people's information. On an interesting note, very few consumers are actually using credit freezing for protection when they have the option. That's probably because they're afraid of alienating the bureaus should they need credit in the future. Some states even have "quick thaw" laws on the books. Those laws allow you to use a secret code for single transactions after a credit freeze. You can then immediately re-freeze your credit. Retailers like that because it still allows people to make impulse buys. In time, Clark believes that all 50 states will have freeze and thaw laws. But instead of fighting the push for these laws, shouldn't the credit bureaus be helping to prevent ID theft?

The website set up by the credit reporting agency Experian is bogus. The name of their website sure makes it sound as though you can get your credit report for free, but that isn't the case. When you go to the site, you are automatically enrolled in a "free trial," for which you will pay $12.95. Don't ever pay to see your credit report at this site! Instead, go to the site that is sanctioned for viewing your credit report for free, really. It's annualcreditreport.com and you can get a report from each of the agencies for free.

Clark gets a lot of calls about credit scores. A few different companies offer credit scores so figuring out which one really matters can be confusing. Just remember that you want your score from the company Fair Isaac. The company’s site is myfico.com and the score is known as your “FICO” score. Scores from Transunion and Experian are basically worthless, so be sure to ask from which company it's coming. You also need to know that the factors making up the score are about to change. The score will still go up to 850, but the rest of it is a mystery because Fair Isaac has refused to disclose most of the information. One item they did offer involves people with “thin histories,” meaning they haven’t had much credit. In the past, these people have had a default score of zero, which is not fair. So, that will change. Once we have more information, we will post it on Clark’s site. In the meantime, the two most important things are paying your bills on time and keeping cards with low credit limits as low as possible. You don’t want to use more than 30 percent of your available credit.

The federal government has a list of “specially designated nationals” that is used to identify criminals and potential terrorists. It comes from the Office of Foreign Asset Control (OFAC), and the Feds began compiling the list after the September 11 attacks. The problem is that innocent, law-abiding citizens are receiving alerts on their credit reports if their names are similar to someone on the terrorist list. The “OFAC” alert that appears on reports tells banks and lenders that you are a potential terrorist. When a car dealership or mortgage company sees this alert, they don’t want to do business with you. It’s not just the stigma that may come along with the alert. Business owners could be arrested for aiding and abetting a terrorist if they sell to someone on the list. So, they are scared, too. In addition, once the OFAC is on the report it’s not very easy to get rid of it. So, just know that this could happen. The person across from you could be completely harmless and you need to be aware of that.

Clark gets so many questions about credit and credit reports that he wrongly assumes that people know all about it. But, according to a recent survey, only 3 percent of Americans know what a credit score is. Worse yet, less than 15 percent of people are checking their credit reports each year. That is stunning. Credit scores are like a grade that tells you whether your credit is poor, fair, good or outstanding. But, unlike school where you get one grade per class, there are three credit scores you can obtain. First, the industry-accepted standard score is called a “FICO” score, which is between 400 and 800 points. But each credit bureau (Experian, Transunion and Equifax) has different information on you, so they compute your score differently. And, your interest rate can change depending on which bureau a lender uses. You must check all three of your credit reports and all three of your credit scores four to six months before you’re going to buy a house. If you’re planning to buy a house in a month, GET THEM NOW! One in three people find mistakes in their reports, so it’s imperative that you do this. The one place to get your credit scores is myfico.com. There are other legitimate sites and other ripoff sites out there, but telling them apart can be difficult. So, stick with myfico.com for your scores. And, you can get your credit reports for free now. But only from one site: annualcreditreport.com. Get familiar with your credit before it’s too late.

There is only one official site where you can get your credit report for free. The site is annualcreditreport.com. There are many other phony sites out there that claim they offer free reports, but it is not true. Instead they charge you a fee for various services. One of these phony sites - freecreditreport.com - is actually owned by Experian, one of the credit bureaus. Some states, including Florida, are so fed up with the deception that they are suing the bogus site. None of the advertisements you see are legitimate. Clark knows this because the only real site doesn’t advertise. So, remember, annualcreditreport.com is the only site you need.

Credit scores can be pretty confusing. That’s in part because the three credit bureaus each use a different score. One score with one company can differ significantly or mean something completely different than another company’s score. So, people never know if they have a good score or not. Well, to complicate things even more, a new scoring method has been introduced. Equifax, Transunion and Experian – the three credit bureaus – have started issuing a score of their own called the “Vantage Score.” The traditional credit score has been formulated through a company called Fair Isaac, which issues a FICO score. About 90 percent of creditors out there use the FICO score and it has been the gold standard. But the three bureaus want part of the money to be made on credit score. So, Experian became the first company to sell this fake score, the Vantage score. And it is a fake score for now. So, for now, continue to get your credit score from Fair Isaac until we learn more about the other method. To get it, go to myfico.com. And you get a credit score when you’re buying a home or any other major purchase.

Equifax, Experian and TransUnion are using lobbyists in Washington to try and eliminate the state laws that protect you when your identity has been stolen. You may have heard of “credit freeze laws.” These are laws some states have enacted that allow consumers to freeze their credit reports if their identity has been stolen. Some states even allow people to freeze credit reports ahead of time as a preventative measure. It prevents their credit from getting trashed – and prevents all of the corrections they must make to make their credit right again – in the event of an ID theft. Clark is in total favor of credit freeze laws. But the credit bureaus are fighting these laws. They don’t make any money selling your information to companies if you freeze your reports. So, they are trying to take away our right to protect our information. And that’s just about as bad as what the thieves are doing themselves. You can do something to stop this. At ConsumersUnion.org, a draft letter is posted that Clark wants you to send to your congressmen and congresswomen. We will update it a letter Clark drafts himself, but for now use this letter. Do your part!

Twelve states around the country have passed identity or credit freeze laws. They are California, Colorado, Connecticut, Illinois, Louisiana, Maine, Nevada, New Jersey, North Carolina, Texas, Vermont and Washington. The laws basically stop identity thieves in their tracks by putting a freeze on all of your information. In some states, you can put a freeze on your account as a preventative measure if you don’t think you’ll need credit anytime soon. But credit bureaus and retailers have been trying to invalidate these laws by kissing up to Congress. In Georgia, credit bureaus and even the Chamber of Commerce are now trying to stop a credit freeze law that is about to go into effect in that state. Shame on these organizations. Clark can’t believe the Chamber of Commerce is getting involved. He knows these organizations need to make money, but they’re doing it at the harm of their citizens

Remember when credit reports were a mystery? A few years ago, we didn’t have access to our credit reports. Then, after some hard work by certain individuals, we gained access but we had to pay. Now, our credit reports are free! But recent statistics show that 60 percent of people haven’t bothered to get their reports. You need to get at least one report a year from each of the bureaus. You just go to annualcreditreport.com and plan out a schedule so that you get a new report from a different bureau every four months. You don’t have to buy anything else on the site, so just skip over all those extra options. Go there for your report only. You should get your credit score once a year and you have to pay for this. But Clark suggests that you get it from Equifax because it's the true score.

If you’d been asked what a credit score was five years ago, would you have known? Ten years ago, did you know what a credit report was? The credit reporting industry used to keep both of these a secret from us. The dossier collecting business is highly profitable in terms of selling your information, and it helped lenders decide whether to give you a loan without your knowledge. But there was a lot of discrimination, and eventually both of these became public. Our three-digit credit score went public when the owner of eloan.com decided to publicize our numbers for free. Banks were furious of course, but it led the way for more access. Tons of companies now sell us our credit scores and we can get our credit reports for free. The end result is that almost 90 percent of people know that paying bills on time affects your score the most. Three-quarters of people know that maxing out your credit card also plays into your score. Your income doesn’t affect your score at all. So, letting people know things really benefits the public. Thank goodness someone had the foresight to open this system up so people could improve their scores and ratings.

The Federal Reserve is trying to figure out what to do about the confusing language in credit card “disclosures.” These notices aren’t written in a way for people to understand easily, and the Fed is trying to change that. Banks are furious about people possibly being able to understand the pamphlets, but it’s definitely a necessity. A reporter at Bankrate.com looked into the paperwork to determine how easy it is to get ripped off on balance transfers, for example. She found that there are 12 things people need to do to pull off a balance transfer without suffering any penalties or fees. There are minimum purchases you must maintain and fees for transferring money. The worst abuses are happening in the credit card industry. You shouldn’t have to go through a 12-step test to make sure you’re not being taken advantage of. Be sure you’re protected. And keep your hard copy of the original offer so you know the rules. And let’s hope the language changes soon.

You’ve probably seen the ads all over Web sites and on TV for “Free Credit Reports.” Most of them are bogus and Experian, one of the three credit bureaus, recently got its wrist slapped for this very thing. Experian was offering “free credit reports online in seconds,” but the company was actually ripping people off for $79.95 each time. By opting for the “free report” people also signed up for an annual credit monitoring service. The company made off with about $80 million, but it’s only being fined about $1 million. That’s pathetic. There is only one legitimate site that offers free reports with no strings attached. It is annualcreditreport.com and it was designated by the federal government after the law making credit reports free went into effect. It started last year in the West, and effective Sept. 1, everyone in America will be able to get one credit report a year FOR FREE! In Georgia, people can see reports from each bureau twice a year. Shame on Experian for trying to dupe people, when the organization is supposed to be a legitimate credit bureau.

An article in Fortune said that Americans take on more debt vs. income then any other country in the world. The article said that Americans couldn’t blame anyone but themselves. Clark was extremely disturbed by the negative tone of the article. He believes American history taught people to pay as you go, until recently when it changed to borrow before you own. As we were given permission to borrow, we smiled, and took the credit line as a green light to spend. Clark says the real issue is personal restraint. You have to know when to cut yourself off. Do you really need it, can you afford it, or do you just want it?

People often feel powerless when they have to deal with one of the three credit bureaus, TransUnion, Equifax and Experian. We try to correct our credit reports and often get no help from these bureaus. The good news is that eventually you’ll be able to receive help from the Federal Trade Commission is a credit bureau ignores you. Under the rules of the Fair Credit Reporting Act, you can file a complaint with the FTC and they will forward it to an escalation department where it’s reviewed on an individual basis. The FTC won’t be your advocate but will help get you inside the credit bureaus. The bureaus then have to respond to the FTC explaining why they are not complying with the FCRA. Go to the Web site, ftc.gov or call 1-877-FTC-HELP. It’s called the “Complaint Referral Program.” Over time, we’ll see if this is a dead end or a real help.

We have set a new record when it comes to our use of credit cards. Currently, we have the largest delinquency rates in the history of the credit card business, and the largest amount of personal debt. If you can’t make your credit card payments, it goes without saying that you need to get back on top of it. If you’re not in trouble, but the danger signals are there, Clark has some tips for you. First of all, running balances is okay but it’s not financially healthy. Many of these balances are all about your lifestyle. So, if you’re just able to make the minimum payment, you need to stop using the card. Clark has learned that asking people to cut up their cards doesn’t work. But putting them away – preferably in a freezer bag with water – will stop you from using them. It’s the ease of pulling out the plastic that kills us. And, the key to making bigger and bigger payments is to put yourself on a schedule. Come up with an amount of cash that you will hold onto until the next payday. It’s not enough to talk about the problem. You’ve got to come up with a solution. Take a brown bag to work. Avoid that expensive cup of coffee every day. People can get by on so much less; they just haven’t tried it yet. And, it’s important to start good money management early. According to Newsday, only one in four percent of parents ever discuss money with their children. There is a real disconnect here. Parents lead by example, so your kids will pick up on what you do not what you say.