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. Or, if one spouse dies, the surviving spouse may find that lenders want to close accounts, or the spouse may not have a sufficient credit history to apply for credit on his/her own.
To help ensure that 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 that credit cards are obtained as joint accounts. If you have an individual account with your spouse listed as an authorized user, the lender can close the account if you die. However, if the account is a joint one, 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 that he/she does not have adequate income for the credit limit.
- Ensure that both you and your spouse have a good credit history. Review your credit reports, ensuring that all information is accurate and that 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.