Credit3 min read · Updated 17 October 2026
How credit card use and loan enquiries affect your home loan approval
High card balances and many loan applications can lower your credit score right before you apply for a home loan. What lenders see and the steps to take first.
Card utilisation
Utilisation is the balance on your cards divided by the total limit. If you owe ₹80,000 on cards with ₹1 lakh of limits, you use 80%. High use can lower your score, and it can also signal that you are stretched. Many lenders and bureaus advise keeping it under 30%. Paying down the balance before the statement date, or asking for a higher limit, lowers it.
Enquiries
When you apply for a loan or card, the lender checks your report. Each application shows as an enquiry. A few are normal when you shop for a home loan. A burst of applications for cards and personal loans just before a home loan can hurt, because it looks like you need credit urgently.
Other things lenders see
- Late payments in the last 24 months, and how late.
- Accounts marked settled, written off or in default.
- The age of your oldest account.
- The mix of secured and unsecured debt.
A 3-month plan before you apply
- Get your reports and read them. See your free report.
- Dispute errors. See how to fix an error.
- Pay card balances down and avoid new applications.
- Clear small loans if you can.
- Check what score gets the best rate. See score and home loan rates.
Common questions
What credit card utilisation is good for a home loan?
Under about 30% of your total limits is commonly advised. Lower is better.
Do loan enquiries reduce my credit score?
Applications can lower it a little, and many in a short time look worse. Checking your own report does not.
Should I close old credit cards before a home loan?
Closing an old card can shorten your credit history and raise your utilisation. Usually it is better to keep it open and use it lightly.