Older borrowers may still be rejected for credit
By Marianne Curphey
Financial services companies in the UK are tightening up their lending policies and employing more stringent criteria when assessing applications for credit. As a result, older borrowers applying for loans, mortgages or credit cards may find it more difficult to secure the best deals.
Credit card companies don't impose a maximum age, as they expect consumers to pay off credit card balances quickly, not carry them long-term. However, that doesn't mean a borrower won't be turned down because of his age.
This might seem surprising, given legislation to prevent age discrimination, but financial services companies are allowed to turn down anyone if they can justify their decision. So although the UK population is ageing, people are choosing to work longer and may be buying homes later in life, this isn't always reflected in the deals available from financial services companies.
"Lenders have their own policy and they can turn down credit card applications for older people provided they can justify their decision," says James Jones, spokesman for Experian. "It is down to the policy of each individual lender -- generally speaking, your credit rating should improve with age."
Of course, not every lender will turn down older consumers.
Andrew Hagger, of Money Comms, says people who have had a credit card since their youth and have used it responsibly should not encounter any problems. But a bank may question a senior with a lot of debt. "If you have a long-term outstanding balance on your card and you are in your late 70s or early 80s, then it might be the case that your credit card company would get in touch with you and discuss how you were going to repay it," says Hagger.
"There is no explicit age limit on credit cards and you won't find age restrictions on application forms; however, older people may find it difficult to get deals based on minimum income requirements if their pension is not large enough," says Hagger. "For example, some cards require a minimum income of £20,000 a year -- cards from Barclaycard and American Express for example. Some older people won't be receiving that amount from their pension, so may not qualify. If you have a pension and are able to demonstrate that you can pay back your card then there is no reason why you could not be accepted."
Mortgages are different. Ray Boulger, senior technical manager at mortgage broker John Charcol, says many lenders insist a mortgage be paid off by a certain age.
"For the majority of lenders, this is age 70 or 75," he says, "but there are some smaller lenders who make an exception for older borrowers -- for example National Counties, Buckinghamshire , Harpenden and Saffron Walden building societies who will look at individuals on a case by case basis."
Published: 13 November 2013
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