Lithuania’s current credit cycle highlights the strong link between housing prices and credit. We explore this relationship in more detail by analyzing the main features of credit, housing price, and output cycles in Baltic and Nordic countries during1995–2017. We find a high degree of synchronization between Lithuania’s credit and housing price cycles. Panel regressions show a strong correlation between a credit upturn and housing price upturn. Moreover, panel VAR suggests that shocks in housing prices, credit, and output within and outside Lithuania strongly impact Lithuania’s credit. Credit growth in Lithuania has shown signs of recovery in recent years. After many years of deleveraging following the global financial crisis, private sector credit has begun to grow in mid-2015. Since then, credit has grown annually by 5.2 percent on average. The acceleration of credit has coincided with strong wage growth, rapid increases in housing prices, and rapid expansion of the housing stock. These developments are taking place against the backdrop of a banking system dominated by Nordic banks. Many Nordic countries in recent years have experienced rapid credit growth and sharp housing price increases, although these trends have moderated recently. The main purpose of this paper is to examine how developments in credit, housing markets and the economy within and outside Lithuania impact Lithuania’s credit. The rest of the paper is divided in five parts: Part II examines Lithuania’s current credit cycle relative to the pre-crisis credit boom. Examining stylized facts about financial crises, it assesses whether the current credit cycle poses risks to financial stability. Part III explores in more detail the relationship between credit, housing price, and output cycles. It describes the main features of these cycles in Lithuania and other Baltic and Nordic countries within and across countries. Part IV employs panel regressions to assess the determinants of a credit upturn. It examines whether the housing price and output upturns contribute to the presence of a credit upturn, while controlling for other variables. Part V assesses potential spillovers from other Baltic and Nordic countries to Lithuania. It examines how credit, housing price, and output shocks in Lithuania and other Baltic and Nordic countries affect, among other things, Lithuania’s credit and implications for financial stability.