If someone tells you that you shouldn't shop for the best interest rates because it will hurt your credit score, don't believe them. They're just giving you a line to get you to sign on the dotted line.

Whenever you shop for rates within a short period of time, the credit scoring agencies lump these requests into one inquiry. For example, suppose you apply to four different mortgage lenders to see who will offer you the best rates and you make all these applications in a two-week period. This would be picked up as shopping for rates and would count as just one "hard" inquiry against your score.

Don't drag out your search too long or the credit scoring company may end up counting the inquiries separately. So when you shop for rates try to keep it to a two week period or less to be sure you won't hurt your score.

Also, don't apply for a new car loan or a new credit card just before you apply for a new mortgage. You will lower your score and you will likely end up with a higher interest rate on your mortgage. Since you'll be paying your mortgage over a much longer period than any other loan, put off any major purchases for about six months before applying for that mortgage loan and pay down debt. That's the best way to get the lowest interest rate offers.

Lita Epstein has written more than 20 books including the Complete Idiot's Guide to Improving Your Credit Score.