Answer: If you were turned down for credit, you have a right under federal law to a free copy of the credit report that was used in making the decision. You should examine the report to see if there are errors that need to be corrected. If so, dispute the incorrect information directly with TransUnion.

Remember that the three credit bureaus are private, competing companies, so the information they collect and report isn’t necessarily going to be the same. Some creditors report information to just one bureau. Other times, one bureau will mistake you for someone else or combine a stranger’s information with your file.

Your scores across the bureaus can vary because the underlying information in the reports can vary, and also because the bureaus sell different credit scores to consumers. Equifax typically sells FICO scores, the same scoring formula most lenders use, while Experian and TransUnion may provide their in-house “educational” scores or a VantageScore. The next time you’re about to apply for a major loan, you’ll want to buy FICO scores from MyFico.com to get a better idea of where you stand.

I announced this offer last week on my Facebook fan page, and based on feedback there, I offer the following clarifications:

• This is a Kindle deal only. No freebies for Nook, Sony Reader or iPad owners. Sorry, guys. I didn’t make the deal–FT Press did. Bug them.
• This is a download. No physical books will be given away. Just ebooks.
• If you don’t have a Kindle, you don’t have to buy one because of this deal. It doesn’t make sense to spend $189 to get a $13 book for free, now, does it? Go to your library. They’ve probably got a dead-tree copy there you can read. Or hang out at Barnes & Noble. There’s usually at least one on the shelf. If not, you have my permission to ask why. (UPDATE: You can also download free Kindle software to get the book. See below.)
• No, I don’t get an incentive for selling Kindles. And I don’t get royalties on books that are given away for free, either. My publisher tells me this may spur sales in coming weeks, but sales have already been fine, so I’m not holding my breath. I just think it’s cool you can get something besides Jane Austen books for free on Kindle. Not that I’m against Jane Austen. Love her. Kiss kiss.
• You don’t have to love the credit scoring system to want to know more about it. Credit scoring formulas can be opaque, frustrating, seemingly illogical–but they’ve also become important to our financial lives, and knowing how they work can save you tens if not hundreds of thousands of dollars in your lifetime. A little education can go a long way.
• Update: You don’t need a physical Kindle to get this deal. You just need a Kindle app on your phone or the software downloaded to your PC (link to download HERE) or Mac (link to download HERE).

Answer: You might want to take a look at the contradictory attitudes you just expressed.

You have a car loan, which means you’re in debt and pay interest to a lender. But you refuse to get a credit card, which can help you build your credit scores without having to incur debt or pay a dime in interest.

Having a credit card does not make you a slave to lenders, unless you’re stupid enough to carry a balance. On the contrary: It can help you build your credit scores to the point where you’re in the cat bird seat, being pursued by mortgage lenders eager to give you a great deal.

If you absolutely can’t trust yourself to have a card without carrying a balance, then of course you should forgo plastic. Otherwise, you could use a card like the helpful tool it can be, charging small amounts each month and paying the balance off in full, to boost your credit scores over time.

Answer: It’s hard to conceive of $100,000 in student loans as “good” debt. Yes, federal PLUS loans offer relatively low, fixed interest rates and flexible repayment options, and the education it bought will hopefully increase your child’s earning power. But the amount you borrowed is stupendous, particularly given your other financial problems.

That’s not what you asked, however, so here’s what you need to know. First, make sure that the credit scores you’re looking at are actual FICO scores. Two of the three credit bureaus sell other scores to consumers, and the numbers you get may be higher—sometimes much higher—than the scores lenders use. You can buy your current FICO scores at MyFico.com.

Paying down installment loans, such as student loans, auto loans and mortgages, will help your credit scores over time and yes, it is possible eventually to achieve 700+ FICO scores without using credit cards. You can get to that level faster, however, if have and use revolving credit (credit cards) responsibly. You don’t need to carry a balance, but you would need to use the card occasionally. Your best bet is to charge 10% or less of the card’s limit and pay the balance in full each month.

Answer: You can’t find out in advance exactly how much your score will drop, but the company that created the FICO score says settling a single credit card debt can drop a 650 score by 45 to 65 points and a 780 score by 105 to 125 points.

Settling a debt can have another consequence: The forgiven debt may be reported as income to the IRS, increasing your tax bill.

Answer: A foreclosure would be a major black mark on the couple’s credit reports and probably would reduce their scores to subprime territory (below 620). Recovering from such credit blows is tougher than it was a few years ago, when lenders were still eager to give money to people with shaky credit.

That means your son and his wife could spend several years in credit limbo. They may have trouble renting an apartment, be required to make bigger deposits for utilities and phone service and even (in some states) pay more for insurance. Whether their credit will recover before home prices do, though, is an open question. Typically, negative marks like a foreclosure fall off credit reports after seven years, and credit scores can recover to near-prime levels before that.

A foreclosure also puts borrowers in a kind of penalty box with lenders. They may not be able to get another mortgage for four to five years. If they were to arrange a “short sale” or voluntarily hand over the keys to the bank, rather than waiting for a formal foreclosure, their “penalty box” period could be as short as two years, although they would still suffer significant damage to their scores.

If the couple are having trouble making their mortgage payment, they should contact a housing counselor approved by the Department of Housing and Urban Development (referrals at http://www.hud.gov to review their options and see whether they should try to pursue a mortgage modification to make their payments more affordable. Relatively few homeowners succeed in getting permanent modifications, but it’s certainly worth a try before they walk away.

They should also read attorney Stephen Elias’ book “The Foreclosure Survival Guide” to understand what may lie ahead.

Answer: You weren’t over the limit, but you were very close to your limit, which these days makes risk-shy issuers very, very nervous. The dramatic reduction in your credit limit was the issuer’s way of saying, “Don’t let the door hit you on your way out.” Your loyalty as a customer clearly didn’t mean much to this particular company.

Fortunately, you can find better treatment elsewhere. If your credit scores are good (740 or above), plenty of other issuers will be happy to give you a credit card. Even if they’re not so great, you may find a happy home with a local credit union that issues cards.

Answer: It’s not clear that you need to do anything. The leading credit scoring formula, FICO, treats large home equity lines of credit as installment loans, even though they’re actually revolving accounts. The company that creates the FICO formula is secretive about what constitutes “large,” but a six-digit line of credit would almost certainly qualify.

Answer: CBC Innovis is a reporting agency that provides a variety of services, including offering credit reports, tax transcripts and appraisal, title and settlement services to lenders.

If the inquiries weren’t connected to your refinance deal, they might be related to a job application, because CBC Innovis also provides employment screening and Social Security number validation. It offers skip tracing and other services for collection agencies and landlords, but given your scores and your situation, those are unlikely reasons for the inquiries.

In any case, you have nothing to be worried about. The only reason you got the “too many inquiries” message is because there wasn’t much else negative to say about your credit situation, which is excellent. Inquiries in general should be a minor concern for most people, since most have little or no effect on their scores.

Unfortunately, it’s pretty tough to tell a company to “butt out” of your credit history, since a variety of companies have perfectly legal access to your information. If you really want to lock down your reports, you can consider a credit freeze, but you’ll still have to “unlock” your information to various companies when you want a loan. For more on credit freezes, visit the Consumers Union website and search on “security freeze.”

The ding to one’s credit rating can’t be good because the account is listed as “closed by credit” and it causes an immediate increase in the debt-to-limit ratio. This seems wrong, and it must have something to do with the credit reform. But what can we as consumers do to mitigate the damage?

Answer: Issuers actually started closing accounts and reducing people’s credit limits when the credit crunch hit in late 2007 — long before the credit card reform act that was signed into law in May 2009.

The trend accelerated as the recession led to a big spike in delinquencies. Credit card companies fled risk, and among the hardest hit were people with less-than-stellar credit. A low-limit card is typically a sign that the cardholder’s credit isn’t great, and some issuers made the decision to close many of these accounts.

A closed account can ding scores further, but the credit scoring formulas don’t care who closed the account. You don’t lose more points, in other words, if a creditor shuts down the account rather than you closing the card voluntarily.

Your husband’s best option at this point may be to check with a local credit union to see if it would issue him a credit card. Credit unions are often more flexible about credit scores than other issuers.

If he can’t get another regular credit card, another option is to apply for a secured credit card that offers a line of credit equal to the deposit he makes at an issuing bank. He should look for a card that charges no upfront fees, has a relatively low annual fee (under $100) and reports to all three credit bureaus. Sites including CreditCards.com, CardRatings.com and Card Hub list such offers.

Once he has the card, he should use less than 30% of its credit limit and pay it off in full each month. Over time, that should help him improve his scores enough to get a regular card.