Buying your first home is an exciting milestone, but it also comes with plenty of financial decisions. One area that’s often overlooked is how your credit card habits can impact the homebuying process. From improving your credit score to managing new homeowner expenses, credit cards can either be a useful tool or a hidden obstacle. Here’s what first-time buyers need to know about using credit cards wisely before, during, and after the homebuying journey.

Why Credit Matters When You’re Buying a Home

When you apply for a mortgage, lenders evaluate your creditworthiness using a few key factors — the most important being your credit score, credit history, and current debt. Credit cards influence all of these areas.

A strong credit profile can help you:

• Qualify for a mortgage more easily
• Secure a lower interest rate on your loan
• Get better terms and fewer fees

On the flip side, poor credit card management can hurt your approval chances. Maxed-out cards, late payments, or a short credit history can raise red flags for lenders. That’s why it’s smart to develop good credit habits well before applying for a mortgage.

1. Start Improving Your Credit Score Early

Mortgage lenders often look for a minimum credit score of 620, but a score in the 740 range or higher can help you lock in the most competitive rates. Here are a few ways credit cards can help you build or improve your score:

Pay on time, every time: Your payment history makes up the largest portion of your credit score. Set up autopay or calendar reminders to ensure you never miss a due date.

Keep your balances low: Aim to use less than 30% of your total available credit. If your card has a $5,000 limit, try to keep your balance under $1,500.

Don’t open or close cards unnecessarily: Every time you open a new card, it creates a hard inquiry on your credit report. Likewise, closing an old card can reduce your average account age and total credit limit, both of which may lower your score.

2. Avoid Big Purchases on Credit Before Closing

As your mortgage application moves toward approval, lenders often do a final credit check before closing. If you’ve suddenly taken on new debt or made a large credit card purchase, it could raise concerns.

Avoid these common mistakes:

• Charging furniture or appliances before you’ve closed
• Opening new store cards or retail financing offers
• Making any purchase that significantly increases your credit utilization

It’s best to wait until the keys are in your hand before making major credit moves.

3. Use Credit Cards to Your Advantage After Moving In

Once you’ve closed on your home, your credit card can become a valuable financial tool as long as you continue using it responsibly.

Look for a rewards card that fits your new lifestyle. Homeownership brings a lot of new expenses, from utility bills to home improvements. Consider a cash back or points-based card that offers rewards on home-related purchases.

Use 0% APR offers strategically. Some credit cards offer 0% interest on purchases or balance transfers for the first 12 to 18 months. These can be helpful if you need to spread out the cost of essential home upgrades, but always have a plan to pay off the balance before the promotional period ends.

Track your budget closely. It’s easy to overspend when you’re settling into a new home. Use your credit card’s spending reports or a budgeting app to keep track of categories like groceries, maintenance, and décor.