Finance Blog

Credit Trends: Mortgages and New Credit Cards

Written by Janet Dedrick on October 25, 2011 in Credit  |   5 comments

Do you know anyone who has been turned down for a credit card recently? More likely, you may have seen someone get a new credit card now who may not have been able to three years ago. During the credit crisis, credit card companies tightened…

Mortgages and new credit cardsDo you know anyone who has been turned down for a credit card recently? More likely, you may have seen someone get a new credit card now who may not have been able to three years ago.

During the credit crisis, credit card companies tightened their regulations and had very strict guidelines about who could and could not open new credit. However, in 2010, one of the credit trends we saw was credit card companies easing their tighter card underwriting, and this has been continuing into 2011.

With credit card companies loosening their restrictions, more consumers are able to get credit and take advantage of more buying power. As our credit reporting models have shown, most consumers’ financial behaviors are linked together. Today, we’ll look more closely at credit card consumers and mortgage holders—and how the two overlap.

Credit card consumers and mortgage holders

What does holding a mortgage have to do with your credit card habits? Consumers with a mortgage are generally lower-risk customers, and credit card companies are willing to give them credit. Forty-two percent of new cards and almost 60 percent of new credit went to consumers with mortgages. On average, credit scores and available credit are higher for consumers with mortgages.

However, about half of the new credit card consumers with a mortgage have property values estimated at $200,000 or below. Thirty-five percent own a home worth between $100,000 and $200,000, and the majority of new credit card consumers have equity in their homes, contributing to their overall financial health.

Some financial markers are out of the consumer’s control. Real estate blogger Ilyce Glink has written about the housing market and how home values continue to plummet. About 35 percent of new cardholders with a mortgage are underwater on their mortgage. Even among new credit card originations for customers with a credit score above 700, 30 percent of those with a mortgage are underwater. But even with falling home values, these mortgage holders are still consumers in the credit world.

Home value and home equity are important factors because consumers with equity in their homes have a better ability to weather financial hardships like unemployment or unexpected medical expenses. However, we see no evidence of lenders using home equity estimates to regulate credit lines.

With uncertainty still present in the economy, credit card lenders are still cautious. We’ve seen new card originations in the last two years, but the credit limits are still tight. Credit lines offered when the new credit was opened were decreased dramatically across all score ranges in 2009 and remain low, but we have seen some easing in 2011.

Money Management Tips: Choosing the Right Savings Account
Money Management Tips: Set Your Savings Priorities
Money Management Tips: Pay Yourself First
Pay Off Debt and Take Advantage of Low Interest Rates
Identity Theft: What To Do If Your Wallet Is Lost Or Stolen




  1. Frank says:

    If your credit history/score has suffered say from an unavoidable bankrupcy,don’t worry,wait til your insurance score catches up because it’s fixed to feed off your credit score and All your insurance premium will go up.Wow,just when you thought you had gained some ground.With Insurance scores it doesn’t matter if you never had a claim for an accident or on your home.You are now in a High risk group and the sad thing is,there’s not a thing you can do about it.What a country.

  2. Patti A. Duncan blueyedlayd@gmail.com says:

    where can I find out what my credit score is?

  3. alabama bankruptcy says:

    Bankruptcy can solve many financial problems- but not everything. Whether or not you are getting a lawyer to help you, you need to know what you are doing in your bankruptcy case so you don’t get burned.
    alabama bankruptcy

  4. Bob T. says:

    I think the credit reporting bureaus deliberately (read: discriminately) keep FICO scores low if you’ve had a foreclosure or short sale. I sold my home in a short sale almost 3 years ago, had over 800 FICO score and have never missed a payment (before or after the short sale), yet despite continuing to reduce the amount of credit I have outstanding my FICO score has not moved up AT ALL.
    I paid off a $24,000 vehicle, and an $11,000 mortgage on land, plus reduced the balances by 20% on the only 2 credit cards I have outstanding, yet over the past 3 years, I have not had a single increase in my FICO score. When questioning the credit bureaus, all they will say is that it is determined by a very complex formula and (they love this word) “algorythm”.

    Has anyone else experienced this “phenomenon”?

  5. Pingback: How Mortgages Can Affect Your Credit Card Application | Atlanta Real Estate Forum

Leave a Comment

Name :

Commenting guidelines

We welcome your interest and participation on this forum, but be aware that comments will be published at Equifax's sole discretion. Please don't use this blog to submit questions or concerns about your Equifax credit report or raise customer service issues. Instead, you should contact Equifax directly for all such matters and any attempts to do so in this forum will be promptly re-directed.

Some other factors to consider when commenting:
  1. Registration and privacy. While no registration is required to visit our forum, participants wishing to post a message must register by creating an account. All personal information provided by forum members incident to registration is governed by our Terms of Use and Privacy Policy.
  2. All comments are anonymous. We'll delete your name, e-mail address, and any other identifying information, including details about your investments.
  3. We can't post or respond to every comment - As much as we'd like to, we can't post every comment, nor can we guarantee that we will respond to each individual message. All questions or comments about your Equifax credit report or similar customer service issues should be handled by contacting Equifax directly.
  4. Don't offer specific legal, tax or financial advice. All of the materials on this Site are for information, education, and noncommercial purposes only and this forum is not intended as a means of expressing views or ideas regarding any specific legal, tax, or investment advice. While offering general rules of thumb is both permitted and encouraged, recommending specific ideas or strategies regarding investments, taxes, and related matters is prohibited.
  5. Credit Repair. This blog is not intended as a venue for the discussion or exchange of ideas regarding credit repair or other strategies intended to assist visitors and community members improve or otherwise modify their credit histories, ratings or scores.
  6. Stay on topic. Your comment should be concise and pertain to the specific post in question.
  7. Be respectful of the community. The use of profanity, offensive language, spam, and personal attacks will not be tolerated and egregious or repeat offenders will be banned from future participation. We encourage disagreement and healthy debate, but please refrain from personal attacks on our WordPresss and contributors.
  8. Finally: Participation in this forum may be terminated by Equifax immediately and without notice for failure to comply with any guidelines or Terms of Use. As such, you should familiarize yourself with all pertinent requirements prior to submitting any response through the blog or otherwise. All opinions expressed in this forum are solely those of the individual submitting the comment, and don't necessarily represent the views of Equifax or its management.

Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.

Credit Archive

Stay Informed Sign up for our FREE Equifax email Newsletter