Credit Issues as You Age
While obtaining credit can be just as important for older individuals as it is for younger ones, older individuals often have unique credit issues. For instance, waiting until after retirement to apply for a loan can result in the loan being rejected because your income is much lower. If one spouse dies, the surviving spouse may find that lenders want to close accounts or he/she may not have a sufficient credit history to apply for credit on his/her own. To help ensure you don’t have credit problems as you age, consider these tips:
Apply for major loans while you are still working. If you are getting close to retirement and know you’ll need a loan, perhaps for a retirement home or new car, apply for credit a few years before retirement.
Make sure credit cards are obtained as joint accounts. If you have an individual account with your spouse listed as an authorized user, a lender can close the account if you die. However, if it is a joint account, the creditor cannot automatically close the account or change its terms. The lender may require your spouse to update the application if the lender suspects he/she does not have adequate income for the credit limit.
Ensure that both you and your spouse have good credit histories. Review your credit reports, ensuring that all information is accurate and you both have sufficient history. That way, either of you will be able to obtain credit if the other dies.
If you are denied credit, find out why. It could have been an error, or you may convince the lender to consider other information. You may also be able to negotiate a compromise with the lender. For instance, if the lender is concerned about your age when considering a 30-year mortgage, perhaps a 15-year mortgage would be acceptable.
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This newsletter was prepared by Integrated Concepts Group, Inc. The opinions expressed in this newsletter are for general information only and are not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. The views expressed are those of the author and may not necessarily reflect those held by PlanMember Securities Corporation. Material presented is believed to be from a reliable sources and PSEC makes no representation as to it accuracy or completeness.