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New survey from Experian Consumer Services reveals homebuyer confidence starts with understanding credit scores
Costa Mesa, Calif., May 27, 2015 — Spring and summer mean warmer weather and increased home sales,* but many homebuyers dread the process. The majority of homebuyers (95 percent) know that credit is important when purchasing a home, and those who know their credit scores feel significantly more prepared to buy according to a new survey commissioned by Experian. In addition, 45 percent of future homebuyers say they delayed purchase to work on their credit and qualify for better interest rates.
“No one likes to go into a lender’s office, whether buying or refinancing, and not know the state of their credit; it makes them feel helpless,” said Becky Frost, senior manager of consumer education at Experian Consumer Services. “Our survey shows when people interact with their credit by tracking it and learning more about the factors that affect it, they feel more confident about their purchasing power.”
The survey results show the difference that credit knowledge makes in the home buying or refinancing experience.
Knowledge = power:
• People who know their credit scores feel significantly more prepared to buy a home versus those who do not know their credit scores (70% vs. 54%).
• The majority of homebuyers understand the importance of their credit scores in securing favorable interest rates to refinance their home (62%).
Uncertainty = concern:
• Some groups are uncertain. Future buyers are anxious about getting good interest rates, with 41 percent concerned their credit score won’t qualify for the best rate available.
• Of the respondents who said they were concerned their credit status would hurt their ability to purchase a home, 27 percent do not know their credit score.
• Of the respondents who do not know their credit score, 48 percent are concerned that their credit status could hurt their ability to purchase a home.
• Fifty-eight percent of future homebuyers indicate that they are actively working to improve their credit in order to qualify for a better home loan interest rate. They take specific action, such as paying off debt (55 percent), paying bills on time (54 percent), keeping balances low on credit cards (28 percent), protecting credit card information from fraud/identity theft (20 percent), and not applying for or opening new credit accounts (16 percent).
Beyond the score:
• Seventy-four percent of recent buyers recognize the impact of poor credit on securing a good interest rate, but fewer (61 percent) understand the potential effects of identity fraud on the financing process.
• Sixty-two percent of future buyers are confident about their credit status, and 60 percent feel financially prepared to buy a home.
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About the survey
The online survey was commissioned by Experian Consumer Services, produced by research firm Edelman Berland and conducted as an online survey of 500 buyers from April 7, 2015, through April 14, 2015. Buyers were defined as adults who had purchased a home within the past year (250 recent buyers) or who plan to purchase a home in the next year (250 future buyers). The margin of error is plus or minus 4.4 percent overall. Additional survey details are available at http://www.slideshare.net/Experian_US/experian-home-buying-and-credit-survey-report-2015.
About Experian Consumer Services
The Experian Consumer Services division 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, cobranded 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.
This press release is provided for general guidance and information. It is not intended as, nor should it be construed to be legal, financial or other professional advice. Please consult with your attorney or financial adviser to discuss any legal issues or financial issues involved with credit decisions.
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 2014, we were named by Forbes magazine as one of the “World’s Most Innovative Companies.”
We employ approximately 17,000 people in 39 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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