Getting the Credit You've Earned

Credit makes it easier to buy that new car—or just a few items at the department store. But seniors may have a tougher time getting credit to make purchases or get loans. That's why you need to know your rights.

Q: Why is credit important?

Credit is an important money management tool for both young and older consumers. But if you're an older consumer who has paid with cash all your life, or if you're a widow or widower whose spouse did not include you on credit accounts, you may find it difficult to get a loan or open a credit card account. The credit-granting institution would have no record of your credit-worthiness to go by. Or, if your income decreased after you stopped working, you may find it harder to get a loan because you have "insufficient income."

Q: Can I be denied credit because of my age?

No, under the federal Equal Credit Opportunity Act, it's against the law for a creditor to deny you credit or terminate existing credit simply because of your age.

Q: What factors do creditors consider in approving a loan or the issuance of a credit card?

A major factor is your current income, which may include money from part-time jobs, Social Security, or pensions, as well as assets such as your home, savings accounts, and stocks and bonds. If you want credit, be sure to let the creditor know of assets that show your financial health.

A creditor usually also checks your credit history with one or more credit bureaus (see "Quick Tips"). That's one of the many reasons it makes sense to check your credit record regularly. Credit reports can contain errors, and you need to get these corrected as soon as possible.

Q: How could the death of a spouse affect credit?

Under the ECOA, a creditor cannot automatically close or change the terms of a joint account solely because of the death of your spouse. But a creditor can ask you to update your application or reapply. This can happen if the account was originally based primarily on your spouse's income and the creditor believes your income alone cannot support the credit line.

After you submit a re-application, the creditor has 30 days to render a decision and inform you in writing. During that time, you can continue to use your account with no new restrictions. And if your application is rejected, you must be given specific reasons or told of your right to get this information.

These protections apply when you retire, reach age 62 or older, or change your name or marital status.

Q: Whom can I contact for additional help?

The Federal Trade Commission (FTC) provides resources on a variety of issues relating to credit, such as how to obtain credit and how to avoid identity theft. To file a complaint or to get free information on consumer issues, visit www.ftc.gov or call 1-877-FTC-HELP (1-877-382-4357).

—Doug Terwilliger, NEA Member Benefits

Quick Tips

Know the Score

Check with the major credit bureaus to learn your credit history—and make sure there are no errors affecting your credit rating. They are:

Equifax
P.O. Box 740241
Atlanta, GA 30374-0241
800-685-1111
www.equifax.com

Experian
P.O. Box 2104
Allen, TX 75013
888-397-3742
www.experian.com

Trans Union
P.O. Box 1000
Chester, PA 19022
800-916-8800
www.transunion.com

Know Your Rights

Under the Equal Credit Opportunity Act (ECOA), creditors may not deny you credit or terminate existing credit cards you have because of your age. The Federal Trade Commission offers information on ECOA and can help you file a complaint if you believe you’ve been unlawfully denied credit because of your age. You can reach the FTC at 1-877-FTC-HELP or www.ftc.gov.