But a problem remains: If you shop slowly--taking more than a month to check rates as Jackson did--the inquiries are no longer consolidated and show up as multiple inquiries. And your credit score could take a hit.
Even lenders that don't use traditional credit scores--such as Fannie Mae--use loan-approval systems that include many of the same standards as the Fair Isaac models, and also would penalize borrowers for leisurely rate shopping.
Here's a way around the problem: First, find out what your credit score is. You can pay Fair Isaac or one of the major credit bureaus to find out, or, if you have Internet access, you can go to http://www.eloan.com. This free service does not use the Fair Isaac model, but it's similar enough to approximate your FICO credit score.
(Fair Isaac and Equifax, a credit bureau, also offer credit scores on the Web. Their service, which can be found at either http://www.equifax.com or http://www.myfico.com, costs $12.95.)
Knowing your credit score can tell you whether you're likely to qualify for the lowest-rate loans. You can then shop for a loan more casually, simply asking lenders for their mortgage rates for good borrowers or by checking newspaper and Internet-based advertisements and rate comparisons.
Use those good-risk rates as a guide to determine how much you can afford to pay for a house. Then you can limit your serious rate shopping--the kind that requires lenders to pull your credit report--until you've found a house you want to buy.
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Times staff writer Kathy M. Kristof, author of "Investing 101" (Bloomberg Press, 2000), welcomes your comments and suggestions but regrets that she cannot respond individually to letters or phone calls. Write to Personal Finance, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012, or e-mail kathy.kristof@latimes.com. For past Personal Finance columns visit The Times' Web site at http://www.latimes.com/perfin.
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Racking Up Points
Here are tips for boosting your credit score:
* Check your credit report for errors. If there are eroneous items, write to the credit reporting company and have those items removed.
* Close unused credit card accounts, but only if they were opened recently.
* Leave old credit accounts open, even if you're not using them, because part of your score is based on how long you've had credit.
* Apply for credit only when necessary. New credit applications can lower your score.
* Pay your bills on time, every time.
Source: Times research
