Lenders assess loan eligibility not just on income and default history, but also on credit card usage. High credit utilization, even with timely payments, can signal financial pressure to banks. Maintaining low credit utilization (ideally under 30-40%) suggests financial flexibility. Furthermore, the timing of credit card payments matters; paying only the minimum or carrying high balances on statements, even if paid before the due date, can negatively impact credit scores and loan eligibility.