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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
3 © Copyright 2015 Daniel J Edelman Inc. Intelligent Engagement
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
5 © Copyright 2015 Daniel J Edelman Inc. Intelligent Engagement
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
6 © Copyright 2015 Daniel J Edelman Inc. Intelligent Engagement
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)
7 © Copyright 2015 Daniel J Edelman Inc. Intelligent Engagement
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
9 © Copyright 2015 Daniel J Edelman Inc. Intelligent Engagement
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
10 © Copyright 2015 Daniel J Edelman Inc. Intelligent Engagement
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
11 © Copyright 2015 Daniel J Edelman Inc. Intelligent Engagement
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
13 © Copyright 2015 Daniel J Edelman Inc. Intelligent Engagement
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
14 © Copyright 2015 Daniel J Edelman Inc. Intelligent Engagement
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