Edmunds.com reports that zero-financing deals hit a record high last month, with more than 22 percent of financed new cars purchased with such deals. That’s up 9 percentage points from a year ago, and just beats  the previous high of 21 percent set back in July 2006.

Toyota, beleaguered by its reported safety problems, offered a zero percent APR on 71 percent of new vehicles financed in March – nearly twice the previous Toyota record of 39 percent in August 2009, Edmunds.com reports. The two brands with the next highest percentages of such deals were Mazda at 58 percent of all financed transactions and Mercury at 32 percent. 

Keep in mind these deals are available only to buyers who meet the credit criteria. “Shoppers should always check their credit score and secure financing from a bank or credit union before setting foot in the dealership so that they have a back-up plan if they get declined when seeking the special deals,” advises Edmunds.com’s Philip Reed.

You can find a list of zero-percent financings offers from Edmunds by clicking here. In addition, because of the special financing, more than 100 new vehicles currently cost less than their one-year old used counterparts. See that Edmunds list here.

We just bought a 2005 Honda Odyssey, and my broker said he might be able to get me better insurance rates if we tried the companies that would calculate premiums based on my credit score. I know it’s excellent, but hadn’t check the exact number in a while, so I tried freecreditreport.com. The site is run by Experian, one of the major credit bureaus.

You can get a free copy of your credit REPORT once a year by calling (877) 322-8228 or at www.annualcreditreport.com (this is the official site that corresponds to the 2003 law requiring the bureaus to give you a free annual report to combat identity theft. Don’t use any others!) But Congress stupidly (in my view) didn’t require the bureaus to provide your actual SCORE.

To get that you have to either pay almost $50 for all three scores, or enroll in each firm’s credit monitoring service and then cancel before they charge you. I chose Experian’s Triple Advantage program, which allowed me to look at my report and score free for 30 days. After that it would automatically charge $14.95 a month to continue the service. (That’s why you have to give a credit card number to get your report, even though it’s technically free for 30 days.)

Of course this is an annoying gimmick. There’s no way to cancel easily online before the 30 days are up — you have to call, be put on hold, and then when you request a cancellation, the service rep launches into a sales pitch for an array of products. Twice I said to the service rep, “I just want to cancel the service.” She responded, “But I’m not finished…” to which I replied, “You are if anything you have left to say is a sales pitch. May I have the confirmation number of the cancellation please?”

When is Congress going to mandate the bureaus show you your all-important score for free instead of having to use these ridiculous bait-and-switch services?

Finally, never pay any service claiming it can fix your score. Anything they can do you can do yourself. See the “credit education” tab at www.MyFico.com, or chapter 5 of my book Money and Happiness.

I was doing an interview last week when the reporter asked, “What about your credit score? Isn’t it true that if you pay off your credit cards in full it hurts your score?” I almost gagged. I went into conspiracy theory mode, figuring the credit card companies had gotten together at some secret summit, concocted this fairy tale and devised ways to propagate it to boost their profits. 

Bottom line: Do not carry a revolving balance on a credit card. This will hurt your FICO score, not help — and hurt your quest to build wealth. (FICO is the score calculated by Fair Isaacs Corp. to determine how likely you are to pay back a loan.) Here are the facts, and how they affect your score: 

-About one-third of your score is based on payment history – for mortgages, credit cards, auto loans, and the like. It looks at the number of accounts that are on time versus past due, how long they’ve been delinquent, and so on. Paying accounts on time and in full will boost your score. 

-Another 30 percent is based on how much you owe to creditors, including the amount you are owe versus the amount of credit you have available to you. Aim to get your debt down to 50 percent of the maximum credit line on each of your cards. Maxing out credit cards to the limit will hurt your score. 

-About 15 percent is related to how long you’ve had particular accounts. The longer, the better, so closing an account that you’ve managed wisely over the years will hurt your score. 

-The next 10 percent is based on the number of accounts opened recently. Don’t apply for a bunch of new cards simultaneously; it will hurt your score. 

-Another 10 percent is based on the mix of credit used (auto loans, mortgages, credit cards of various type, etc.) If you have a balance of different kinds of loans, you’ll have a better score than someone who has one type of credit – say, multiple credit cards.  Your score does not include any negatives from public records, such as bankruptcies, liens, or court judgments. The score does not include your address, age, gender, race, religion, country of origin, salary, occupation, or your employment history. 

Order your credit report from all three bureaus every year to check for mistakes. You can request the reports by visiting www.annualcreditreport.com; by calling (877) 322-8228; or by sending a written request to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. Although you will receive a free report, you still have to pay a fee to get your actual credit score. Be sure to obtain these reports directly from the three major bureaus – Experian, TransUnion and Equifax; do not provide personal information to any third parties who offer to get free reports for you.  For more on credit scoring, see myfico.com. 

According to a study released today by the Consumer Federation, many consumers still don’t understand their credit scores, despite the increasingly powerful role they play in our financial lives.

Half of respondents called their knowledge of credit scores “fair” or “poor.” Three-quarters thought their income had an influence on their score. (It doesn’t.) About one-third thought that their state of residence and their education affected their score. (They don’t.) Another one-third didn’t know that paying off a big credit card bill would improve their score. Just 47 percent could name the three major credit bureaus (Experian, Equifax and TransUnion).

The study found that consumers with an average score would reduce card finance charges by $76 annually if they raised their score by 30 points. If all consumers raised their scores by 30 points, total consumer savings would exceed $20 billion. A few quick examples from www.MyFico.com:

· Raising one’s credit score from 580-619 to 660-699 on a 30-year fixed mortgage for $300,000 would reduce one’s annual interest expenses by $5,148.

· Raising one’s credit score from 620-639 to 670-699 on a 15-year home equity loan for $50,000 would reduce one’s annual interest expenses by $1,044.

· Raising one’s credit score from 590-619 to 660-689 on a 36-month auto loan for $25,000 would reduce one’s annual interest expenses by $708.

A few weeks back I wrote in my Yahoo!Finance column about a survey by creditcards.com, which also found that the majority of respondents didn’t understand how to boost their credit scores. For example, a majority believe that it would be financially prudent to have no debt whatsoever, close credit card accounts, and have unused credit cards.

All three can hurt. In the case of no debt, this does not mean you should carry revolving debt from month to month! It means you shouldn’t pay for everything in cash. You need to establish good credit history in order to get a mortgage, rent an apartment, etc. For instance, pay for groceries, gasoline and other day-to-day expenses on a credit card, and pay off the balance on time and in full every month. Never max out a card, and don’t play that game where you move credit from card to card.

As for closing credit card accounts, this can hurt your score because it reduced the amount of credit you have available, causing a higher “credit utilization rate.” (Example: You had $10,000 in available credit and use $2,500 of it a month — for a utilization rate of 25%. You close a card with a $5,000 credit line. Now you have $5,000 left, and you’re using $2,500 of it — or 50%. People with the best credit scores use 10% or less.)

Finally, never use your credit score to get 15 or 20 percent off a retail purchase by opening a store card. If you spend a day at the mall opening a lot of open credit, the credit bureaus look at you as having the potential to go crazy one day and charge up all those cards. 

Be sure to order your free credit report and clean up any errors. According to the Consumer Fed, only 59 percent of consumers have ever ordered their reports. Experian, Equifax and Transunion must make a report available to you for free once a year. You can request your free report by visiting www.annualcreditreport.com; by calling (877) 322-8228; or by sending a written request to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. (Beware of copy-cat websites that may be trying to steal your identity!)

For tips on getting out of debt, see this story.