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Credit Management for High-Net-Worth Individuals

Rothstein Kass
March 13, 2014


If you have cash, why do you need credit? It’s a common question we often get asked by our clients and other advisors who work with high-net-worth individuals.

Many wealthy people believe their credit must be in good shape since they have a lot of money. Surprisingly, this couldn’t be further from the truth. The fact is, it’s absolutely necessary for high-net-worth individuals to protect and manage their credit and not make assumptions about their credit rating.

You may think you don’t have to worry about your credit score because you have a high income and money in the bank. The truth is, however, that regardless of your wealth and income, banks may refuse to lend you money without a high credit score. And with the extremely stringent credit requirements banks now have, it can even be difficult for someone with a very high income to obtain a mortgage, business loan or auto loan. And more often than not, it’s only when you actually need access to credit for a particular reason that you find this out.

Of course, if your credit score is too low to obtain a loan, paying in cash may be an alternative. This may not be the wisest option, however, especially in light of the low interest rates available to those with good credit. Paying cash also drastically decreases the amount of money you have available for potentially higher-returning investments.

Click here to read the paper in its entirety.

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