Some real estate groups have labeled this summer as the best buying season since 2006; however, a new survey from Experian Consumer Services shows that a number of potential first-time buyers may have to wait, as they are not preapproved for a loan and must work on their credit in order to obtain a low interest rate.
Roughly 67 percent of future buyers are not preapproved, and 45 percent of potential first-timers have to delay the purchase of a home because they need to boost their credit. These findings are based on a survey of 250 individuals who intend to purchase a home in the next year and 250 people who have recently acquired a home.
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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.
Specific credit-improving actions taken include:
- 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).
- Refraining from opening or applying for new credit accounts (16 percent).
“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,” said Becky Frost, senior manager of consumer education at Experian.
Additional report findings noted that 41 percent of respondents are concerned their credit score won’t qualify for the best interest rate available.
Of this group of individuals, 27 percent do not know their credit scores. Out of this faction, 48 percent are concerned their credit status will hurt their ability to buy a home. And more than a third of potential first-timers (35 percent) said they don’t know what steps to take in order to qualify for a large loan.
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