Credit Scores Weighing On The Minds Of Young Homebuyers

April 21, 2016

Not all surprises are good. For every successfully operated surprise party in which the guest of honor reacts with a mixture of child-like delight and awe, there is another person about to be surprised by seeing their credit score for the first time. For many this is not an good surprise, as upon seeing the number their face does not bloom into child-like delight and awe, but instead contorts into something more closely resembling Major Arnold Toht’s face after he stared at the freshly opened Ark of the Covenant.

Credit remains very tight, especially among young buyers, and many are worried their credit scores will not allow them to get financing for a home. As Diana Olick of CNBC writes, according to a survey conducted by Experian, about one third of future first-time homebuyers are concerned their credit score will hurt their ability to buy a home. 45 percent of future first-time buyers said they have delayed a home purchase in order to improve their credit. Another 20 percent said they would probably not buy a home for the next five to ten years.

Almost 75 percent of respondents said they are actively trying to improve their credit by paying down debt, making sure bills are paid on time, and taking extra precautions to protect against identity theft and fraud. However, improving credit is a process that takes some time, which may be a significant factor in the fact that only 20 percent of homebuyers in March were first-time buyers.

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