August 2007 - The Experian-Gallup Personal Credit Index is down 13 points to 82. This is the lowest level for the Personal Credit Index since May 2006 when it was at 74. Although consumer credit confidence has grown, negative perceptions still remain in the real estate industry with the impact of the subprime mortgage market and sharp increase in housing foreclosures. Additionally, the survey revealed how consumers view the ease of credit and their own level of debt.

Mortgage Market Attitudes

Key results on consumer attitudes toward the mortgage market include:

• 58 percent believe the problems in the subprime mortgage market will affect the overall mortgage market, while 24 percent feel the problems will be contained.
• 61 percent of consumers who are very familiar with subprime mortgage loans believe the problems in the subprime mortgage market will spill over into the overall mortgage market.
• 55 percent believe the federal government should pass new legislation helping subprime borrowers keep their homes and avoid foreclosure.

Overall, about 52 percent of consumers surveyed feel the average price of homes in their area will increase over the next year, while 29 percent believe prices will remain about the same. Eighteen percent of consumers expect that prices in their area will decrease.

Among homeowners, 50 percent believe that average prices will increase, while 32 percent feel they will stay about the same.

Consumer Credit Perceptions

In January and February of this year, the Experian-Gallup Personal Credit Index reached a new high at 105. Since then, consumer credit perception has deteriorated, falling between 90 and 92 in March through May before rebounding to 95 in July.

Additional survey results on consumer credit perceptions include:

• 89 percent of consumers do not plan to apply for credit in the next three months.
• 44 percent of consumers feel it is easier to get credit now than it was three months ago.
• 30 percent of households having annual incomes of less than $40,000 a year are uncomfortable with their debt burden, while only 16 percent of those with annual incomes of $75,000 or more are uncomfortable
• 17 percent of consumers know someone who has been turned down for credit during the past three months.

Looking ahead to the next three months, 86 percent of the public report they are very (55 percent) or somewhat (31 percent) comfortable in making their monthly payments on their current overall debt.

About the Experian-Gallup Personal Credit Index

The Experian-Gallup Personal Credit Index is based on a monthly nationwide survey of households and measures four key areas related to credit: level of debt, monthly payment burden, credit rating and debt extension capability. The sampling was conducted in April, May and June 2007 and included 3,013 adults, age 18 and over, randomly selected from across the country. The sampling error is plus or minus two percentage points.