Financial deterioration is a direct consequence of the cognitive impairment that characterizes Alzheimer’s disease, even in its early stages.
- An increase in credit card delinquencies was observed more than five years before Alzheimer’s diagnosis, while mortgage delinquencies were observed three years earlier.
- This financial deterioration is a likely consequence of compromised decision-making when managing money and financial exploitation by others.
- The likelihood of delinquency increases steadily as the diagnosis of memory impairment approaches.
Credit scoring is a system of evaluating data to determine a person’s creditworthiness and thus reduce banking risk. According to a studya decline in this score may be a warning sign of undiagnosed memory problems. To reach this conclusion, scientists from Georgetown University and the Federal Reserve Bank of New York (USA) used data from a previous study conducted on 10,000 households. Their goal? To examine the effect of undiagnosed memory problems on credit outcomes. “Credit cards and mortgages are the main components of debt for people aged 70 and over.”
Alzheimer’s: increasing delays in reimbursement in the years preceding a diagnosis of the disease
According to the results, in the five years before a possible Alzheimer’s diagnosis, credit scores began to decline by four to six points. At the same time, the likelihood of being behind on debt payments increased by one to two percentage points. The authors found that scores steadily deteriorated in the quarters before diagnosis. While these changes may seem small, they can have outsized impacts, leading to higher interest rates, reduced access to credit, and even foreclosures. The effect on credit card and mortgage debt, the two largest debt categories for older Americans, was particularly concerning.
“This financial deterioration that we are seeing reflects the cognitive decline that these people are experiencing.” Indeed, early-stage dementia can cause memory loss, causing people to forget to pay bills. It can also impair financial decision-making, leading to risky borrowing or vulnerability to financial exploitation. Some personality changes associated with the early stages of Alzheimer’s disease, such as decreased conscientiousness and increased neuroticism, may also play a role.
Using “credit assessment data to help identify people at risk of memory impairment”
Another finding: Among credit card holders, the likelihood of delinquency was 21% higher two years before diagnosis. For mortgage holders, the delinquency rate was 11% higher during the same period. These high delinquency rates persisted for years after diagnosis. “In addition to the human toll, a diagnosis of this type can be financially disruptive for families and exacerbated by the adverse financial effects of undiagnosed memory impairment. Our findings support the potential utility of credit assessment data to facilitate early identification of those individuals at risk for memory impairment,” concluded Carole Roan Gresenz, lead author of the study.
