They say they’ll count 401ks as assets (which they actually need very little of), but they won’t count our distributions as income, though we have proof of distributions for four years. They say they’ll only count our pension income as income. No answer to when I tell them, how do you guys ever lend money to retired people, since most people don’t even have pension income nowadays?
I don’t think being retired is much of a problem for credit card applications, as when they ask about what income I get and where from, I just mash it all together and put “retirement income”. They don’t seem to ask for specifics.
The credit score thing can be ridiculously silly. We closed some old credit cards we hadn’t used in many years, and our scores took a huge dive, over 100 points for my husband, though neither of us have had a single credit blip or late payment in over 40 years of borrowing.
Is this because they are voluntary distributions? As opposed to RMDs? I wonder if RMDs would count since they aren’t optional. I don’t know your age.
But, maybe they don’t count the income because it isn’t guaranteed because you are younger than the age for RMDs and you get to choose how much income to take. I’m speculating here.
@notrichenough -I’ve had that happen,too. It’s annoying because my credit cards are ALWAYS paid in full every month. And they have been for 45 years.
I dont think someone should be penalized for using credit they qualify for when they have a record of paying it off right away.
When my fil passed away, my mil did not have a single credit card in her name. She had simply been an authorized user on fil’s cards. Her SS was not much (neither was fil’s), and I do wonder if what helped her the most was her teacher pension.
But, I do think getting more credit is often based on existing credit.
Yes, they’re not RMDs, so not mandatory. But it would seem pretty short sighted for them to not count them, with several years of distributions and plenty in the account because they were voluntary. Then again, I’ve realized that making sense isn’t part of the process!
Why do I have a feeling that it takes far longer for scores to go up than to go down?
Hope people who are getting ready to retire are reading this and keeping these issues in mind.
We applied for a HELOC over four months before we retired, but the credit union took SO LONG to process the application, we had retired, and had to show proof of our pension income, which we hadn’t received yet.
My mil got a huge tax bill this year on capital gains for some stock she had to sell for my fil’s nursing home. They own stocks instead of an IRA.
No idea but she has an accountant and a financial adviser. I’m no expert but it was a lot! Now she gets to sell more to pay her taxes. My husband says there’s a step up basis now so it shouldn’t be a problem
Now I guess I know why her FA wanted to transfer stocks to a brokerage account instead of selling and writing us a check?
I also wonder when you are 90, your accountant is in his 70’s and semi retired but it seems to me that the FA and the accountant should have coordinated the withdrawal
Wow - (that coming from a person who has 0 credit cards in common with husband).
I have actually heard of others like her, especially in that generation.
It is certainly easier to get credit when you have credit.
I opened “joint” credit cards with each of my kids when they went off to college, and that helped them get really high credit scores fairly early in life.
That stepped-up basis can matter a LOT for taxes.
I think I’ve posted this before, but my aunt owned a home in California that was worth over a million bucks (I know, not a lot for there, but it was purchased for 10%ish percent of value during time I’m thinking of). IF she would have sold it before she died, she would have had to pay a lot in taxes. The goal was for her son to not have to sell it until she died, and he would get the stepped-up basis (I may not have the exact word correct, but you get the idea).
Because of cc, this is one reason why H now has his own venture X. He only had 1 card with a $5K limit. Better than nothing, but not enough. And my income is primary. He too has never paid a bill since we got married. This is why I had older S be my financial household backup person since middle school.
Two people in my office have parents who (both husband/wife) have never owned a credit card or debit card at all. It not that uncommon here for that generation. Heck, another coworker in his 40s got rid of all of theirs when they were in their 20s. They just use debit. They haven’t had any trouble getting loans
Several years ago I realized all of our credit cards were either joint or I was the authorized user. I was working and got a master card in my own name , then later got my own AMEX. I was very happy I had done that. Every adult should have at least one credit card in his/ her own name.
Especially since there’s so many new customer credit card offers out there. You can make thousands of dollars in miles, points, cash. Unless you’re a Dave Ramsey acolyte or filthy rich, I can’t understand why someone wouldn’t do that.
yes, I understand your point but there is zero difference once your score is 740+. In other words, no bonus points from any credit service/bank for having a higher score.
The fact that it may bounce around the 800’s should not matter to anyone.
