A national survey by Experian about home buying 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.
Many future home buyers 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 home buyers surveyed are keeping balances low on credit cards and 15 percent are taking steps to protect their credit information from identity theft and fraud.
Unfortunately, low credit scores have led some home buyers 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.