In honor of National Grandparents Day — the first Sunday of September after Labor Day — it might be a good idea to review a few things regarding credit and senior citizens. There are a few stories banging around out there about people being denied credit because of their age. Is it possible to be too old for a credit card?
The answer, from a credit acceptance standpoint, is that it is not possible to be too old for a credit card. In fact, the Equal Credit Opportunity Act explicitly prohibits it, along with discrimination on the basis of race, color, religion, national origin, sex, marital status or if you are on public assistance.
Discrimination can occur in many forms. It may be difficult to determine if you are being discriminated against, but here are the major things to know about. You can always investigate a little deeper if you think you or your senior friend has been the victim of credit discrimination.
What creditors cannot do
During the application phase, the creditor cannot impose different terms or conditions, like a higher interest rate or higher fees, based on your age. Nor can they ask about your marital status as far as if you’re widowed or divorced, or collect information about your spouse, if alive.
During the decision phase, creditors can’t make a decision about granting credit or setting terms if you’re over 62 – unless it works in your favor. That includes considering that your income may drop if you are about to retire. Nor can creditors discount your income because it comes from retirement payments, like a pension or Social Security.
The only things that matter
The only criteria that matter are things like income, expenses, debt-to-income ratio, credit history, payment history and all the other things used in a FICO score.
What to do if you are discriminated against
So what happens in these circumstances, when someone is denied credit for age? What if it happens to you or someone you love? You should call the customer service line, ask for a supervisor, and tell them about the Equal Credit Opportunity Act. The decision should be reversed shortly thereafter, provided you meet true underwriting standards.
If the decision isn’t reversed, then you can escalate the matter. Most people do the wrong thing here – they write to the customer service department, or they find some complaint address or phone number.
The secret problem solver
The dirty little secret that gets the best results: Call the company’s vice president of corporate communications. Tell them your situation, and that you really don’t want to go to the media about this, but you will if the right person doesn’t get in touch with you. Guess what? You’ll get the right person sent to you right away. That’s because a public relations nightmare is the last thing a communications VP wants to deal with.
If, after all of this, you still believe you should have been approved for credit, then you should contact your state attorney general’s office, the Federal Trade Commission, the Consumer Financial Protection Board, and consumer-friendly reporters. It may take time, but you will at least have put the creditor on notice.
Seniors image via Shutterstock.