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That's not true. FICO scoring is 50% of a credit decision. The other 50% is loan type, existing lines, how credit is used and assets if applicable.
You forgot income. The single biggest reason retired people have trouble getting much credit is because their income is too low. Retirement income is almost always lower than employment income. Your score can be 850, but, without enough income, you won't get the credit for things you might want to buy, such as a condo or house near a beach or anything like that. Creditors figure nobody should spend more than about a third of their income on housing. But if you're retired near a beach, and have medical insurance covering everything, what do you need to spend much money on besides housing? They should figure it would make sense for a retired person to spend 75% of income on housing, in some situations. But no, because of the bad credit habits of younger people, a lot of retired people are shut out from what they could afford but can't because of those rules.
Yes, this is very true.
I have 2 friends who wanted to wait to move into their retirment home.
They retired, searched out a retiremeent home but when they applied for a mortgage (not wanting to pay 100% cash), they had a very hard time getting a mortgage. The problem, no income (as the banks saw it).
They didn't count SS income, pension income or the size of the balance in a savings/brokerage acct.
No large national bank would talk to them
they had much easier time with local banks who were willing to work with them.
The smaller banks looked more favorablly on the loan when they agreed to automatic withdrawals from a savings acct.
So yes, the biggest problem for seniors to get a mortgage approval is not your FICO score, but income that counts as income.
Buy your retirement home before you guit your day job.
And don't tell the bank you are about to retire
You forgot income. The single biggest reason retired people have trouble getting much credit is because their income is too low. Retirement income is almost always lower than employment income. Your score can be 850, but, without enough income, you won't get the credit for things you might want to buy, such as a condo or house near a beach or anything like that. Creditors figure nobody should spend more than about a third of their income on housing. But if you're retired near a beach, and have medical insurance covering everything, what do you need to spend much money on besides housing? They should figure it would make sense for a retired person to spend 75% of income on housing, in some situations. But no, because of the bad credit habits of younger people, a lot of retired people are shut out from what they could afford but can't because of those rules.
Yes, you are correct. I did forget about the income.
All most require is tax returns showing income. That is also why self employed often have hard time proving income. Then with new credit standards they look at debt to income. But the advantage most retired have is ability to buy large equity by down payment. I have many friends retired who had no problem at all getting a mortgage with good credit ;large equity by down payment and income as shown on tax returns.
Thanks to everyone for the thoughtful suggestions, although I don't plan to need any credit, it would'nt hurt to prepare for the unforeseen while I still have the ability to do something about it.
We are talking mortgages here. I suggest you try to get a loan without two year verified income such as income tax forms. Then I suggest you read on what FICO is based on at their site. But then large equity by down payment can overcome many things in a fixed asset loan such as a home. This isn't pre Dodd-Frank days.
If you are truly interested in getting and maintaining a high FICO score across all 3 bureaus all you have to do is pay your regular monthly bills online using 3 credit cards. Or just pay 1 bill. If you want to squeeze every last point out of your score go over to creditboards.com. You don't have to pay any interest to show credit card usage.
Mine was 828. I am not complaining, but I wonder why not 850? I owe nobody anything and I rarely use a credit card (have a Visa and Mastercard) other than my American Express Gold. I had also forgotten I opened a few store accounts like Lowes, Home Depot, Belk, Kohl's for discounts but I have never charged anything on them.
They retired, searched out a retiremeent home but when they applied for a mortgage (not wanting to pay 100% cash), they had a very hard time getting a mortgage. The problem, no income (as the banks saw it).
They didn't count SS income, pension income or the size of the balance in a savings/brokerage acct.
That's not true at all.
And I should know considering my wife and I applied for and received a mortgage from a big bank when we bought our condo on Miami Beach three years ago. (We paid cash for the house in Las Vegas when we initially retired five years ago.) Not only did the qualifying income come from our pensions, but we also had to provide copies of all of our bank and brokerage account statements.
And I should know considering my wife and I applied for and received a mortgage from a big bank when we bought our condo on Miami Beach three years ago. (We paid cash for the house in Las Vegas when we initially retired five years ago.) Not only did the qualifying income come from our pensions, but we also had to provide copies of all of our bank and brokerage account statements.
Bada Bing! Same storyline here. We didn't need to verify all assets as at a point pension, one SS income, credit score and partial assets were enough.
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