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Chapter 2. Senior Citizens and Credit > Equal Credit Opportunity Act

Equal Credit Opportunity Act

Under the federal Equal Credit Opportunity Act, a bank or any other institution granting credit or a loan may not deny credit or terminate existing accounts due to age. If you are over sixty-two years old, you may not be denied credit because credit-related insurance is not available owing to your age. (Credit insurance pays off the creditor if you die or become disabled.) Lenders or credit card issuers often offer this insurance to you when you take out a loan or a credit card; however, it generally is not a particularly good buy. You can usually do better on your own.

The Equal Credit Opportunity Act also provides some measure of protection for people who retire, reach the age of sixty-two or have a joint account with a spouse who predeceases them. In these instances, the law does not permit the creditor to automatically close or change the terms of the account. However, the creditor is allowed to ask you to update your information or to reapply if the creditor reasonably believes that your income will no longer be sufficient to support the particular line of credit. Once you have submitted the new information or have reapplied, the creditor must give you an answer within 30 days. During this time you may continue to use your account without any additional restrictions.


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