Can my credit card impact my home loan application?

Can my credit card impact my home loan application?

Last updated: 01 September 2019

Ready to apply for a home loan? Before you click the submit button, you may want to think about how your credit card could impact your application.

Lenders want to know that you can comfortably afford your home loan repayments, so they’ll look at your income, expenses, spending habits, as well as the amount of credit you currently have against your name when assessing your application.


Your credit card limits

Even if you never reach your credit limit, the lender could factor in your credit card limit(s) (not the balance owing) as part of the assessment. This is to ensure that even if you happen to max out all your credit cards, you can still afford all your ongoing expenses, your home loan repayments and your credit card repayments.

If you have multiple credit cards, you may want to consider reducing your credit limits or consolidating and closing some accounts before submitting your home loan application.


Your credit card repayment history

It’s not just your credit limits you need to consider. Did you know that late credit card repayments can also impact your home loan application? If your answer is ‘no’, you’re not alone. Research conducted by Experian found that only 34.3% of respondents understood that their credit card repayments would impact their future mortgage application.

Lenders want to see that you have a history of paying your bills on time. If you have missed credit card payments in the past, this could prevent you from getting approved for a home loan. Experian research shows that just one missed credit card repayment in the last three months can lead to a 22% drop in your credit score1. That’s why it’s more important than ever to pay your credit card on time.


Before you submit your home loan application:

  • Check and monitor your credit score and credit report
  • Consider reducing your credit limits or closing unused accounts
  • Make all your repayments on time
  • Limit any new applications for credit


Ready to start comparing home loans? Check out Credit Savvy’s home loan comparison service or request a free appointment with an eChoice mortgage expert.


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1 Experian research based on their credit bureau data of 14 million open credit cards and a population of 9.4 million individual open credit card holders.