Credit When You're Over 62
is an important money management tool for both young and older consumers.
Yet the elderly, particularly older women, may find it difficult
to get credit.
an older consumer who has paid with cash all your life, you may
find it difficult to open a credit account. That's because you have
"no credit history" of how you paid on credit. If your
income has decreased, you may find it harder to get a loan because
you have "insufficient income." Or, if your spouse dies,
you may find creditors trying to close joint accounts. A "joint
account" is one for which both spouses applied and signed the
the federal Equal Credit Opportunity Act (ECOA), it's against the
law for a creditor to deny you credit or terminate existing credit
simply because of your age. This brochure explains your rights and
offers tips for applying for and maintaining credit.
Applying for credit used to mean asking your neighborhood banker
for a loan. Now, with national credit cards and computerized applications,
the day of personal evaluations may be over. Instead, computer evaluations
look at, among other things, your income, payment history, credit
card accounts, and any outstanding balances. Paying in cash and
in full may be sound financial advice, but they won't give you a
payment history that helps you get credit.
indicator of your ability to repay a loan is your current income.
Those who consider income must include types of income that are
likely to be received by older consumers. This includes salaries
from part-time employment, Social Security, pensions, and other
may want to tell creditors about assets or other sources of income,
such as your home, additional real estate, savings and checking
accounts, money market funds, certificates of deposit, and stocks
age 62 or over, you have certain other protections. You can't be
denied credit because credit-related insurance is not available
based on your age. Credit insurance pays off the creditor if you
should die or become disabled.
other hand, a creditor can consider your age to:
applicants who are age 62 or older.
determine other elements of creditworthiness. For example, a creditor
could consider whether you're close to retirement age and a lower
While a creditor cannot take your age directly into account, a creditor
may consider age as it relates to certain elements of creditworthiness.
If, for example, at the age of 70, you apply for a 30-year mortgage,
a lender might be concerned that you may not live to repay the loan.
However, if you apply for a shorter loan term, increase your down
payment, or do both, you might satisfy the creditor's concerns.
Your Credit History
A creditor will often check your credit history with a credit bureau.
If you want to know what's in your credit file, contact the credit
bureaus listed in the Yellow Pages under "credit" or "credit
rating and reporting." Because more than one bureau may have
a file on you, call each until you locate all the agencies maintaining
your file. The three major national credit bureaus are:
P.O. Box 740241, Atlanta, GA 30374-0241; (800) 685-1111
Experian (formerly TRW), P.O. Box 2104, Allen, TX 75013; (888) EXPERIAN
Trans Union, P.O. Box 1000, Chester, PA 19022; (800) 916-8800.
There's no charge for your report if a company takes adverse action
against you based on your credit report such as denying
your application for credit, insurance, employment, or rental housing
and your request your report within 60 days of receiving the notice
of the action. The notice will give you the name, address, and phone
number of the credit bureau that supplied the information. In addition,
you're entitled to one free report a year if you can prove that
(1) you're unemployed and plan to look for a job within 60 days,
(2) you're on welfare, or (3) your report is inaccurate because
of fraud. Otherwise, a credit bureau may charge you up to $8 for
a copy of your report.
find that your file doesn't list all of your credit accounts. That's
because not all creditors report to credit bureaus. You may ask
that additional accounts be reported to your file. Some bureaus
may charge for this service.
information about shared accounts should be reported in your name
and your spouse's. If it's not, ask the creditor in writing to report
the account in both names.
a Credit History
If you're denied a loan or credit card because you have no credit
history, consider establishing one. The best way is to apply for
a small line of credit from your bank or a credit card from a local
department store. Make sure you list your best financial references.
Make payments regularly and make certain the creditor reports your
credit history to a credit bureau.
Under the ECOA, a creditor cannot automatically close or change
the terms of a joint account solely because of the death of your
spouse. A creditor may ask you to update your application or reapply.
This can happen if the account was originally based on all or part
of your spouses income and if the creditor has reason to believe
your income alone cannot support the credit line.
you submit a re-application, the creditor will determine whether
to continue to extend you credit or change your credit limits. Your
creditor must respond in writing within 30 days of receiving your
application. During that time, you can continue to use your account
with no new restrictions. If you're application is rejected, you
must be given specific reasons, or told of your right to get this
protections also apply when you retire, reach age 62 or older, or
change your name or marital status.
It's important to know what kind of credit accounts you have, especially
if your spouse dies. There are two types of accounts individual
and joint. You can permit authorized persons to use either type.
account is opened in one person's name and is based only on that
person's income and assets.
If you're concerned about your credit status if your spouse should
die, you may want to try to open one or more individual accounts
in your name. That way, your credit status won't be affected.
you're applying for individual credit, ask the creditor to consider
the credit history of accounts reported in your spouse's or former
spouse's name, as well as those reported in your name. The creditor
must consider this information if you can prove it reflects positively
and accurately on your ability to manage credit. For example, you
may be able to show through canceled checks that you made payments
on an account, even though it's listed in your spouse's name only.
account is opened in two people's names, often a husband and wife,
and is based on the income and assets of both or either person.
Both people are responsible for the debt.
If you open an individual account, you may authorize another person
to use it. If you name your spouse as the authorized user, a creditor
who reports the credit history to a credit bureau must report it
in your spouse's name as well as in yours (if the account was opened
after June 1, 1977). A creditor also may report the credit history
in the name of any other authorized user.
The ECOA does not guarantee you'll get credit. But if you're denied
credit, you have the right to know why. There may be an error or
the computer system may not have evaluated all relevant information.
In that case, you can ask the creditor to reconsider your application.
believe you've been discriminated against, you may want to write
to the federal agency that regulates that particular creditor. Your
complaint letter should state the facts. Send it, along with copies
(NOT originals) of supporting documents. You also may want to contact
an attorney. You have the right to sue a creditor who violates the
of the Currency
Compliance Management, Mail Stop 7-5
Washington, D.C. 20219
Member Banks of the Reserve System
and Community Affairs
Federal Reserve Board
20th & C Sts., N.W.
Washington, D.C. 20551
Credit Union Administration
1776 G St., N.W.
Washington, D.C. 20456
Federally Insured Banks
of Consumer Programs
Federal Deposit Insurance Corporation
550 Seventeenth St., N.W.
Washington, D.C. 20429
Insured Savings and Loans, and Federally Chartered State Banks
Office of Thrift Supervision
1700 G St., N.W.
Washington, D.C. 20552
retail, gasoline, finance, and mortgage companies)
Federal Trade Commission
Washington, D.C. 20580