You know you need to know your credit score, but how do you get it without getting shafted?

Credit scores serve as the report card for consumer adulthood in America. But bad grades can cost you a lot more than embarrassment -- they lead to higher interest rates and fewer opportunities.  In one typical scenario offered up by MyFico.com, a 120-point difference in credit score could cost a home buyer with a $300,000 loan about $300 extra every month in mortgage interest, or more than $100,000 in additional interest during the life of the loan. So knowing your credit score is of paramount importance.

You might have heard that Americans will enjoy increased access to their credit scores this year thanks to the massive financial reform bill passed by Congress last year. That's true, but scores are still a long way from being truly free. The Fair Access to Credit Scores Act forces lenders to divulge credit score information to consumers, but only after something bad has happened, such as a rejected application. That's a little like getting your cholesterol numbers from the doctor after you suffer a heart attack. 

It's important to know your score before you apply for a car loan or a home loan, but for the foreseeable future, you'll have to pay for it. Here are five common Red Tape Traps you face getting your credit score, along with information on the right way to get it.

1)      Many Web sites and TV ads say they offer your score for free. None of them are telling the truth. There's no way to get it for free.  With only slight variation, most free score Web sites require users to sign up for credit monitoring services that can cost $150 or more annually. Sure, there are free trial periods, but many consumers report trouble canceling the trial before their credit cards are charged and getting refunds.

2)      Even when you do sign up with a "free" score service, the scores you receive are usually not the "real" credit score used by lenders, but an approximation based on a separate formula.  These imitation scores can vary by 100 points from the FICO score used by about roughly 8 out of 10 lenders.  That means their real value is suspect.

3)      You can buy your "real" FICO score from MyFico.com. But it costs $19.95 for a one-time peek. And you'll have to hunt around for the chance to buy it. The MyFico folks are playing the same game everyone else does, teasing you on their home page with a big link that says "Free Instant Online Access" and entices you to fill out a bunch of forms. Once you do, you are hit with a $14.95 credit monitoring subscription. How any company can justify a home page link that reads "Free Instant Online Access" link, but connects to a final page button that reads "Make Purchase Now," is beyond me. Here's the correct link for a one-time purchase. If you have any doubts at all about your credit health, you should buy your score a couple of months before making a major lending decision.

4) The term FICO score is a bit misleading. Consumers usually have three FICO scores, one for each credit bureau. Each bureau generates a score based on the FICO formula created by the Fair Issac company in the 1960s.Because the information in your three credit reports can vary, the three FICO scores can vary. You must pay $19.95 for each score, but in many cases -- if your three reports contain similar information -- purchasing one of the scores is good enough, says scoring expert John Ulzheimer, president of Consumer Education for SmartCredit.com.  Consumers in the South should opt for an Equifax score; all other consumers should purchase from Trans Union, based on the companies' geographic market dominance, Ulzheimer said.  

For good measure, here's an even more confusing (and relatively recent) development -- MyFico.com users can only obtain two of their three scores, the FICO scores generated using Trans Union and Equifax data. Experian no longer allows the MyFico folks to sell their score, meaning there is no way for consumers to obtain this information prior to a purchase.  Two out of three will have to do. Remember, other services that sell credit scores can only approximate the FICO formula and score. And one final bit of confusion: while most lenders rely on these FICO-based scores, many lenders have their own, proprietary scores. There's no way to obtain them pre-purchase, either.

There are tools which allow you to estimate your score for free, however.  Ulzheimer says consumers can create a "poor man's versions" of their credit score by obtaining their credit reports, then plugging the data into one of the tools offered by MyFico.com or Bankrate.com. The score ranges churned out by the tools are "pretty accurate," he said.

The Fair Isaac folks even offer an iPhone app which offers a score estimating tool. You can read more about it at this link.

5)      Don't confuse your credit score with your credit report. Both are important but are used very differently.  The best truly free way to deal with a potentially bad score before a purchase is to deal with the underlying issues that cause it.  Obtain a copy of your credit report at the only authorized source: http://AnnualCreditReport.com . Then, work to clean up the report one black mark at a time by disputing inaccuracies and paying off past-due balances. Here's an FTC tip sheet on the dispute process.

ADDITIONAL RESOURCES:

What's a good credit score? That's hard to answer: http://www.credit.com/blog/2010/04/whats-a-good-credit-score-these-days/

Will you ever get a free score? http://www.credit.com/news/experts/2010-09-10/the-man-behind-the-fair-access-to-credit-scores-act.html

Herb Weisbaum -- Free Credit Scores (for some): http://www.msnbc.msn.com/id/41159095/ns/business-retail/

Liz Weston -- Free scores for all? Not so fast
http://ht.ly/3TDsp

U.S. government consumer info: http://www.pueblo.gsa.gov/cic_text/money/creditscores/your.htm

Credit score basics from Fair Isaac: http://scoreinfo.org/

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"Five Red Tape Traps" is an occasional series which will focus on answering the most important questions consumer face in the 21^st Century economy. What traps have you found obtaining your credit score? What other basic personal finance questions do you have?  Respond below.

If bank fees are a mystery to you, you're not alone. Government investigators dispatched by Congress last year to find fee schedules at banks around the country came back empty-handed 22 percent of the time. And at one-third of the banks, information on overdraft fees and procedures was nowhere to be found.

The Government Accountability Office study, which was released Monday, concluded that consumers lack the most basic information to "comparison shop" when selecting banks.

Lack of a clear and conspicuous fee schedule violates the 1991 Truth in Savings Act and Federal Reserve Regulation DD. But while banking regulators cited firms for ignoring fee disclosure rules 1,674 times between 2002 and 2006, the GAO found that significant consequences for violations are rare. Only twice did regulators undertake formal enforcement actions.

In other words, it's far more likely that you'll get a parking ticket for breaking parking rules outside a bank than it is the bank will be fined for disobeying federal lending laws.

While the fees may be a carefully guarded secret, their consequences are obvious. Last year, banks grabbed $36 billion out of depositors' accounts in fees, the GAO said. Fees are up 11 percent since 2000, and are becoming an ever more important part of bank business, accounting for 27 percent of banks' "non-interest income" last year, up from 24 percent in 2001, the report said.

The results echo those of a 2001 study by the Public Interest Research Group, which concluded that it was impossible at the time for consumers to intelligently compare the costs levied by banks.

"That's the fundamental issue," said Ed Mierzwinski, who conducted the PIRG study, added that nothing had changed since he examined the issue. "It's amazing that banks get away with all this," he said.

Mierzwinski said PIRG believes banks should be forced to publish all fee information on their Web sites -- more than half of banks don't, the GAO found -- so consumers could comparison shop from home. Such information would inevitably lead to creation of Internet sites where fee schedules are compiled and displayed for easy side-by-side comparison. Similar sites comparing credit card interest rates and terms are popular among credit card shoppers.

The GAO study was requested by Rep. Carolyn B. Maloney, D-N.Y., who has introduced legislation to improve bank fee disclosures related to overdrafts. Among other things, the Consumer Overdraft Protection Fair Practices Act would require consumers to affirmatively accept overdraft fees before a bank could enroll them in overdraft protection programs.

"This bill would cure one of the main problems reported in this report. It would eliminate the ability of banks to hide overdraft fees from consumers," Maloney said.

The GAO investigators spotted an interesting trend in analyzing bank fees over the past six years – the lower the interest rate set by the Federal Reserve, the higher the fees charged by the banks.

"Low interest rates combined with increased competition from other lenders can make it difficult for banking institutions to generate revenues from interest rate 'spreads,' or differences between the interest rates that can be charged for loans and the rates paid to depositors and other sources of funds," the GAO reported.

Watch for more fees soon
So when interest rates are down, banks don't make as much money from loans, and have to compensate by raising fees, the report suggested.

That means consumers should be on the alert for more fees, as the Federal Reserve's Board of Governors is now aggressively cutting interest rates.

Consumers also should be on the alert for banks ignoring the Truth in Savings Act, Mierzwinski said. But because consumers don't have the right to sue for non-compliance, their only recourse is file a complaint with regulators, which he says often falls on deaf ears.

"Banking regulators have never met a bank that they want to punish for anything less than money laundering or out and out fraud," he said. "And we have to rely on regulators. The way the law is written, if regulators don't protect us, we can't protect ourselves."

RED TAPE WRESTLING TIPS
If your bank does not have a fee schedule posted in an obvious area, you should complain and ask if it has been cited. But complaining isn't straight forward. To do so, you need to determine which of these five agencies regulate your bank. Follow the link to land on each agency's complaint page.

National banks (have the word National or the initials N.A. in their name) are regulated by the Office of the Comptroller of the Currency.

Some state banks report to the Federal Reserve Board. Call and ask your bank if you can't tell.

State banks that don't report to the Federal Reserve Board are regulated by the Federal Deposit Insurance Corporation.

The National Credit Union Administration regulates most credit unions (information on contacting some state-chartered credit unions is available at this link).

Federal savings and loan banks, along with federally chartered savings banks (identified by the initials F.S.B.) are regulated by the Office of Thrift Supervision.