The homebuying process is a wake up call to many consumers about the importance of a good credit history and credit score
Future home buyers are concerned about their credit and its impact on obtaining a loan, according to a national survey by Experian
COSTA MESA, Calif., April 21, 2016 /PRNewswire/ -- A national survey by Experian about homebuying and credit found that many future home buyers, especially first time buyers, do not feel confident about their credit score status. In fact, 34 percent of future buyers say their credit score might hurt their ability to purchase a home and 45 percent have delayed a purchase to improve their credit score.
"Your credit profile is one of the factors that can have a substantial impact on securing a home loan because it is used by lenders as an indicator of your financial health," said Rod Griffin, director of Public Education at Experian. "Consumers planning to purchase a home should check their credit scores and reports to see where they stand. From there they can develop a financial plan so they are in the best place to try to secure the loan they desire."
Many future homebuyers are taking action to improve their credit profile. Almost 70 percent of survey respondents are paying their bills on time and 60 percent are paying off debt. In addition, 28 percent of future homebuyers surveyed are keeping balances low on credit cards and 15 percent are taking steps to protect their credit information from identity theft and fraud.
"It is important to take steps early in the homebuying process to allow time to make changes and have those changes be reflected on your credit score," Griffin explained. "This requires ongoing tracking so it's recommended that consumers utilize a product such as Experian Credit TrackerSM, which not only offers access to an Experian credit report and FICO® Score but many educational resources."
Unfortunately, low credit scores have led some homebuyers to delay or completely forego a home purchase, with one in five reporting that they were likely to opt out of the loan process or purchasing a home all together for the next five to 10 years. Of those deciding to simply delay a home purchase, 45 percent reported the delay was made in order to secure better interest rates.
Other key findings:
- Thirty-five percent of future buyers said they do not know what steps to take to qualify for a larger loan
- Twenty-nine percent of consumers surveyed would purchase a more expensive home if they had better credit and could qualify for a larger loan
- Three out of four future buyers are not pre-approved for a home loan
Throughout the month of April, Experian is celebrating Financial Literacy Month and encouraging individuals to address money matters and take full advantage of resources designed to improve their financial literacy. For more information on credit and how your score can impact your homebuying experience, visit the Experian blog.
About the survey
The online survey was conducted by Edelman Berland on behalf of Experian from Feb. 19–24, 2016, among 500 adults who purchased a home within the past year or plan to purchase in the next year, and who reside in the United States. This online survey is not based on a probability sample; therefore, no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact email@example.com.
About Experian Consumer Services
Experian Consumer Services, a part of Experian, provides credit monitoring and other informational products, such as identity protection, to millions of consumers via the Internet. The organization enables consumers to monitor their credit reports online, check their FICO® Scores and protect against identity theft. Its products include Experian Credit TrackerSM and ProtectMyID®.
Experian Consumer Services has established integrated, co-branded relationships with leading online financial destinations that provide consumers with a broad range of comprehensive online financial products and information essential to managing one's financial life. For more information, visit http://www.experian.com.
We are the leading global information services company, providing data and analytical tools to our clients around the world. We help businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making.
We also help people to check their credit report and credit score, and protect against identity theft. In 2015, we were named by Forbes magazine as one of the "World's Most Innovative Companies."
We employ approximately 17,000 people in 37 countries and our corporate headquarters are in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2015, was US$4.8 billion.
Experian and the Experian marks used herein are trademarks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the property of their respective owners.
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