If you're an older consumer who has paid with cash all your life, you may find it difficult to qualify for credit. You also may find it harder to get a loan if your income has decreased after your retirement or the death of your spouse. Consider the following tips:
1. KNOW YOUR RIGHTS. It's illegal for a creditor to deny you credit or terminate existing credit simply because of your age.
2. KNOW WHEN AGE MATTERS. A creditor may consider your age in some specific cases. If you apply for a 30-year mortgage at age 70, a lender could be concerned that you won't live to repay the loan. To satisfy those concerns, increase your down payment and apply for a shorter loan term.
3. APPLY FOR CREDIT WISELY. When reporting your income on your credit application, include salaries from part-time employment, Social Security, pensions and other retirement benefits. You also may want to tell creditors about assets and other sources of income, such as stocks and bonds.
4. CHECK YOUR CREDIT HISTORY. To find out what's in your credit file, contact the three major national credit bureaus: Equifax, P.O. Box 105873, Atlanta, GA 30348, (800) 685-1111; Experian, P.O. Box 949, Allen, TX 75013, (800) 682-7654; and Trans Union, P.O. Box 390, Springfield, PA 19064-0390, (800) 916-8800.
5. ESTABLISH A CREDIT HISTORY. Start by applying for a small line of credit from your bank or a credit card from a local department store. Make payments regularly, and make sure your credit activity gets reported to a credit bureau.
6. MAKE PLANS WITH SPOUSE. You may be asked to update your application or reapply altogether if your account was based on all or part of your spouse's income. You may want to open one or more individual accounts so your status won't be affected if your spouse dies.
7. KNOW HOW TO GO SOLO. When opening an individual account for the first time, ask the creditor to consider the credit history of accounts reported in your spouse's or former spouse's name. You may be able to use canceled checks to show that you made payments on an account listed in your spouse's name only.
8. IF YOU'RE DENIED CREDIT, you have the right to know why. The creditor should reconsider your application if all relevant information was not evaluated.
9. COMPLAIN TO THE RIGHT PEOPLE. If you believe you've been discriminated against, write to the federal agency that regulates that particular creditor. Send your letter along with copies (not originals) of supporting documents.
10. LEARN MORE. To request a copy of the November 1998 consumer publication Getting Credit When You're Over 62, contact: Consumer Response Center, Federal Trade Commission, Washington, DC 20580, (202) 382-4357.
Source: Federal Trade Commission (www.ftc.gov)