NEW YORK (TheStreet) -- The Federal Reserve has introduced a number of credit card rules and guides to help protect and educate consumers. The newest is Consumer's Guide to Credit Reports and Credit Scores.

The guide describes basic information for consumers on credit scores,such as what a credit score is, where it can be used and why it is critical for consumers to protect their credit history. The guide is part of the final rules in the Fair Credit Reporting Act (FCRA) that go into effect Jan. 1. FCRA was passed seven years ago.

The FCRA will require lenders to inform consumers when negative information on credit reports causes a higher interest rate on a loan. This notification also applies if a consumer is denied insurance or employment because of information in the credit report.

Once a consumer is hurt by a credit report, the lender, insurance company or employer must send a notification providing the name, address and phone number of the credit bureau that provided the credit report that was used to make the decision. The consumer can get a free credit report from this credit bureau, but it must be requested within 60 days after receiving the notice. The Fed hopes this will encourage consumers to review their credit reports and correct inaccurate or incomplete information.

The new Consumer's Guide to Credit Reports and Credit Scores was created to help consumers understand the notices and new information they may get from lenders under the FCRA.

Why does this matter?

Your credit report identifies who you are, where you live and summarizes your financial story. It reveals more to lenders and businesses than you probably tell your closest friends. It provides details of current and some past loans including mortgage, credit card and student loans. It shows how much you owe, the terms and your history of making payments. It also lists any liens, court judgments and bankruptcies, and companies or persons who have recently requested a credit report.

Lenders use credit reports to make lending decisions and set interest rates. Employers can look at credit reports during the interview process; landlords use it to screen renters. Utility companies use them in applications for service. A bad credit report can make it difficult for you to get a job, an apartment or even government benefits.

While most of the information in the Federal Reserve's guide has been outlined in other measures, it is a message that is beneficial due to the weight of the Federal Reserve seal. It not only tells how to get a copy of your credit report from the three credit bureaus, but also how to correct errors in credit reports.

However, even the powerful Federal Reserve can't provide some of the answers that will clear up the darkest mysteries and frustrations of credit reports -- how many points does a negative action affect the credit score? How long does this drag down the score? What real steps can a consumer take to significantly rebuild and recover?

But at least it's a start.

Bill Hardekopf is chief executive of

LowCards.com

, which compares and rates more than 1,000 credit cards. He is the co-author of "The Credit Card Guidebook."