Experian Home Buying and Credit: Survey Report, 2015

1

April, 2015

HOME BUYING AND CREDIT:

Survey Report

2 © Copyright 2015 Daniel J Edelman Inc. Intelligent Engagement

WHO HOW MANY ACCURACY WHEN HOW

Home Buyers(Purchased

within the past year or plan to purchase in the

next year)

n=500(250 Recent, 250 Future

Home Buyers)

Margin of Error =

± 4.4%

(± 6.2% for each audience)

Data Collection Occurred

April 7-14, 2015Online Survey

RESEARCH OBJECTIVE: To garner media-genic research around home buyers’ attitudes toward credit scores,

financial responsibility and the purchase process

Research Methodology


Key Findings

Buyers understand

the importance of one’s credit score when

purchasing a home, and

many future buyers are concerned about their own credit

status.

More than two in five

future buyers are worried

that they will not qualify for the best home loan rate and have delayed purchasing to improve their

credit.

Just half of recent buyers

report checking their credit as soon

as they considered

purchasing a home.

Home buyers are less

informed about the impact of

identity fraud and the

importance of one’s credit score when refinancing

home.

OVERALL RESULTS


Q7: To what extent do you agree or disagree with the following statements? (Shown: Top 2 Box, Agree)Q9: In your opinion, how important is one’s credit score in purchasing a home? (Shown: Top 2 Box, Important)

Most know how credit affects home buying but just half are actively working to improve their scores

95%Say that one’s credit score is important in purchasing a

home

55%Are working to improve their

credit to qualify for a better home

loan rate

Credit Impact onHOME BUYING

Working to IMPROVE CREDIT

95% FOR BOTH FUTURE AND RECENT

BUYERS


I was / am worried my credit sta-tus might hurt my ability to pur-

chase a home

I am concerned that my credit score doesn’t qualify for the best

home loan rate

I felt / feel prepared financially to purchase a home

37% 38%

70%

48% 47%54%

Impact of Knowing Credit Score on Home Buyer Per-ceptions

Know Credit Score Do Not Know Credit Score

Those who know their credit scores feel more confident about the home buying process

Q7: To what extent do you agree or disagree with the following statements? (Shown: Top 2 Box, Agree; Shown among those who know their credit score, n=388 and those who do not n=112)


Q7: To what extent do you agree or disagree with the following statements? (Shown: Top 2 Box, Agree)Q9: In your opinion, how important is one’s credit score in purchasing a home? (Shown: Top 2 Box, Important)

Fewer are aware of their credit’s impact on refinancing though many have recently refinanced or plan to

62%Agree their credit score affects the interest rate to

refinance a home

22%Have refinanced in the past year or plan to in the

year ahead

Credit Impact onREFINANCING

Recent / PlannedREFINANCING

29% FOR RECENT BUYERS

FUTURE HOME BUYERS’

EXPERIENCE


Q7: To what extent do you agree or disagree with the following statements? (Shown: Top 2 Box, Agree; Among future buyers)

Many future home buyers are concerned about their credit status and its impact on their purchase ability

60% ofFUTURE BUYERSfeel financially

prepared to buy a home

40% of FUTURE BUYERSsay their credit will hurt their

ability to purchase a home

62% ofFUTURE BUYERS

are confident about their credit

status

Future BuyerCREDIT CONFIDENCE

Future BuyerPREPAREDNESS

Future BuyerCREDIT CONCERNS


Q7: To what extent do you agree or disagree with the following statements? (Shown: Top 2 Box, Agree; Among future buyers)Q8: Which of the following activities are you MOST focused on to improve your credit? (Shown: Top 2 choices among future buyers working to improve their credit, n=166)

Paying off debt

Paying bills on time

Keeping balances low on credit cards

Protecting credit info from fraud and identity theft

Not applying for / opening new credit accounts

55%

54%

28%

20%

16%

Future Buyer Credit Building Activities

(Shown: Top 2 Choices Among Future Buyers)

58%

of FUTURE BUYERS are working to improve their credit to qualify for a better home loan rate, but

35% of FUTURE BUYERS say they do not know what steps to take to qualify for a larger loan

Some address these concerns by building their credit, but a third of future buyers do not know how to start


Q6: Have you already been pre-approved for a loan for your next home purchase? (Shown: Among future buyers)Q7: To what extent do you agree or disagree with the following statements? (Shown: Top 2 Box, Agree; Among future buyers)

Future buyers are particularly anxious about getting a good home loan rate and most are not pre-approved

Future BuyerLOAN PRE-APPROVAL

Future BuyerPURCHASE DELAY

Future BuyerLOAN RATE CONCERNS

41% ofFUTURE BUYERSare concerned

their credit score doesn’t qualify

for the best home loan rate

45% ofFUTURE BUYERS

delayed a purchase to

improve their credit to get

better interest rates

67%Not Pre-approve

d

RECENT HOME BUYERS’

EXPERIENCE


Q11: Did you, yourself, check your credit report or credit score at any point in the home buying process? (Shown: Among recent buyers)Q13: You mentioned that you checked your credit report or credit score in the process of purchasing a home. Which of the following, if any, applied to you? (Shown: Among recent buyers who checked their credit score in the process of purchasing a home, n=192)

Just half of recent buyers checked their credit early on, and many were surprised by something in their report

My credit score was higher than I expected

I was surprised by my credit score

My credit score was lower than I expected

There was something negative on my credit report I didn't know

about

43%

30%

21%

14%

NET 31%found

something

negative when they

checked their credit report

51%

26%

23%

When first considered purchas-ingLaterNever

Recent BuyerCREDIT CHECKING

Recent BuyerCREDIT REACTIONS

NET 77%

checked their credit


Difficulty securing a loan Difficulty getting a good interest rate

Difficulty getting a loan large enough to suit

one's needs

Requiring a co-signer

75% 74%66%

58%

72%

61%54%

47%

Recent Home Buyer Impact Perceptions

Poor Credit Identity Fraud

Q10: In which of the following ways do you think having a poor credit status could affect a potential home buyer? (Shown: Among recent buyers)Q14: In which of the following ways do you think a victim of identify fraud could be affected when buying a home? (Shown: Among recent buyers)

Recent buyers recognize the impact of poor credit, but fewer understand the effects of identity fraud

-13-12

-11

Difficulty securing a loan Difficulty getting a good interest rate

Difficulty getting a loan large enough to suit

one's needs

Requiring a co-signer

15

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Experian Home Buying and Credit: Survey Report, 2015