High Credit Card Balances Could Be Hurting Your Next Mortgage
The Bank of Canada may have kept rates steady in July, but borrowing costs are still putting pressure on many Canadians. One growing trend? More people are holding onto credit card balances for longer.
Even if you’re making payments on time, those balances could be quietly lowering your credit score—and that can mean fewer mortgage options, higher rates, or even a declined application.
Why lenders care
When reviewing applications, lenders look closely at your credit score. One major factor is credit utilization—the percentage of your available credit you’re using. If you regularly carry more than 50% of your limit, your score can take a hit, even if you pay off the balance right after. Just one maxed-out card can drop your score by 30+ points, according to credit expert Richard Moxley.
Minimum payments aren’t enough
Paying only the minimum keeps your account in good standing, but it won’t lower your debt or raise your score. With many credit cards charging 20% interest or more, balances can snowball quickly.
One possible solution
If you’re a homeowner with equity, refinancing your mortgage to consolidate high-interest debt could:
- Lower your monthly payments
- Free up cash flow
- Improve your credit score in just a few months
It’s not the right move for everyone, but in the right situation, it can be a real game-changer.
Time for a credit check-up?
If you’re unsure how your credit looks—or want to make sure it’s not holding you back from your next purchase, renewal, or refinance—let’s connect. Together, we can explore your options and create a strategy that works for you.