09/16/2026
What Is Credit Utilization — And Why Does It Matter When Buying a Home?
If you're thinking about buying a home, here's a credit term you should know:
Credit utilization.
Simply put, it's how much of your available revolving credit you're currently using.
If you have a credit card with a $10,000 limit and your balance is $5,000, you're using 50% of your available credit on that card.
Why does that matter?
Credit utilization is one of the factors that can have a significant impact on your credit score. Generally, carrying balances closer to your credit limits can negatively affect your score, even if you've been making every payment on time.
And when you're preparing to buy a home, your credit score can affect the mortgage programs and interest rates available to you.
Here's something else people don't always realize:
Your credit card balance reported to the credit bureaus may not be the same as the balance you see when you log into your account today. Credit card companies typically report balances periodically, often around the end of a billing cycle.
So if buying a home is in your future, don't wait until you're ready to make an offer to start looking at your credit.
And before making big changes—paying accounts off, closing cards, opening new ones—talk to your mortgage professional. What seems like the obvious move isn't always the best move for your particular loan.
Have questions about getting yourself ready to buy? Let's talk.
I'm never more than a call, text, or click away.