Utah's housing market is still booming, which means local homebuyers are gearing up for the busy summer season.

If you're in the hunt for a new home, you're probably wondering what interest rate you'll get on a mortgage. And that may lead you to wonder how your credit score is looking.

It did for a reader named Jared. He sent me an e-mail to say he and his wife recently finished paying off a credit card and plan to pay off an auto loan, then purchase a house. Jared said they want to do whatever they can to get a good mortgage interest rate, and they have a "perfect" history of paying bills on time.

"One thing we are doing to build our credit rating is using the credit card we just paid off to make Internet purchases and such, and then paying it off before we accrue any interest," Jared wrote. "Here's the question. Our credit card was issued by a different institution than the one where we keep our regular checking and savings accounts. This presents a bit of an inconvenience as far as having to actually visit the credit union to pay off our credit card balance. ... We have considered closing that credit card account and getting a credit card through our primary institution, where we also have our auto loan.

"With one institution reporting on our auto loan, and another on our credit card, is this helping our credit rating more so than if we had one institution reporting on both loans? Does the two different reports have a positive impact on our credit score?"

That's an interesting question, Jared. For help with an answer, I contacted Craig Watts, public affairs manager for Fair Isaac Corp. in Minneapolis.

Fair Isaac is the company that pioneered the FICO credit score used by most lenders to evaluate consumer credit risk. Most people have three FICO scores, one for each of the three credit bureaus -- Experian, Trans-Union and Equifax. Each score is based on information the credit bureau keeps on file about you, according to the Fair Isaac Web site. And your three FICO scores affect both how much money and what loan terms lenders will offer you at any given time.

That three-digit number, for example, could mean the difference between an interest rate of 6.2 percent (if your score is 760 to 850) and 7.8 percent (if your score is between 620 and 639). The median FICO score in the United States is 723.

But what about Jared's question? Well, Craig says it shouldn't matter what institution is reporting credit information, as long as it's reported accurately to whichever credit bureau your mortgage lender is using.

"To scoring models like FICO, it doesn't matter what institution is providing the accounts," Craig says.

However, he says, that does not mean Jared should assume he and his wife will have a wonderful FICO score. Sounds a bit self- serving, since Fair Isaac sells credit information, but Craig says it makes sense to check your credit score before trying to get a home loan.

"It could be that the way he and his wife have managed their credit, they have outstanding FICO scores, so their nail-biting may be pointless," Craig says. "Or, they may have a borderline score."

If you want to purchase a report that includes your FICO score from all of the big three bureaus, you can do so through the myfico.com Web site for $44.85. And you can receive free copies of your credit reports from those bureaus (although not with FICO scores) by going online to www.annualcreditreport.com.

Craig says you need this information, because if your credit reports contain errors, you need to fix them right away.

"The worst time to learn of problems is when you're sitting across the desk from a lender," he says.

If your FICO score is lower than you hoped, you can take steps to improve it. Craig says that, in general, your score will increase if you pay down credit card debt, make sure you're always on time with bill payments and --

particularly if you're thinking of applying for a mortgage in the near future -- don't open new accounts.

"Each time you open a new account, it dings your credit rating a little bit, because, statistically ... it puts you in a slightly riskier class of customers," Craig says.

The score will rise over time if the new account is managed properly, he says, but it will be a negative in the short term.

Based on what you wrote, Jared, it sounds like you should be in good shape as you prepare to take out your mortgage. Based on Craig's advice, you probably should keep your accounts where they are and keep paying off debt. Then your credit score will be high, your mortgage interest rate will be low, and, hopefully, you'll soon be enjoying the house of your dreams.

If you have a financial question, send it by e-mail to gkratz@desnews.com or by regular mail to the Deseret Morning News, P.O. Box 1257, Salt Lake City, UT 84110.

E-mail: gkratz@desnews.com

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