Credit Scores Matter to Just 50% of Americans When Qualifying for a Mortgage, Study Reveals

The assessment of your creditworthiness and credit scores plays a crucial role in determining whether you can qualify for various home loans.

Interestingly, FormFree’s study also uncovered that a significant portion of Americans lacks awareness about their own credit scores. (Photo: GoBankingRates)

Credit Scores Matter to Just 50% of Americans

A recent study conducted by FormFree indicates that just 50% of Americans are of the opinion that their credit scores should be taken into consideration when assessing their eligibility for a mortgage, Yahoo reported.

In the survey conducted by FormFree, it was found that just 49% of respondents believed their credit scores should be considered when determining their eligibility for a home loan.

Interestingly, a slightly higher percentage of respondents, 53%, indicated that they would prefer their ability to pay their bills on time to be factored in instead.

This suggests that a significant portion of the American population values responsible bill payment as a more important indicator of creditworthiness than their credit scores.

Furthermore, the study revealed that only 50% of the surveyed respondents believed they would one day be able to afford a house. This finding sheds light on the prevailing concerns and uncertainties surrounding homeownership among Americans.

FormFree’s research also delved into the perception of credit scores needed to qualify for a mortgage.

The majority of respondents believed that credit scores ranging from 670 to 769 would be necessary. However, a concerning 20% of respondents admitted that their current credit score falls below 669.

Close to half, specifically 49% of the respondents, pointed out that “inadequate credit scores” pose a significant obstacle to homeownership for the average American.

Interestingly, FormFree’s study also uncovered that a significant portion of Americans lacks awareness about their own credit scores. It revealed that one in ten Americans have no idea what their credit score is, highlighting a need for greater financial literacy.

Additionally, one in five respondents admitted to not knowing how to check their credit score.

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How to Obtain Free Credit Scores Report

To address this issue, the law entitles individuals to obtain a free credit report each year from the three major credit reporting agencies: Equifax, Experian, and TransUnion.

To further aid consumers during the pandemic, USAGov has made it possible for every American to access a free credit report each week until December 2023.

When obtaining these reports, it is crucial to visit AnnualCreditReport.com, the only website authorized by the federal government to provide free credit reports from the three agencies each year.

Additionally, consumers can request individual copies of their credit reports from each of the credit reporting agencies.

To effectively monitor their credit report throughout the year, the Consumer Financial Protection Bureau recommends requesting the reports separately or every four months.

Understanding the importance of credit scores and being proactive in monitoring one’s credit report can empower individuals to make informed financial decisions and work towards improving their creditworthiness.

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