Study Links Credit Scores and Alzheimer’s Disease in Seniors

Missing numerous bill payments can damage a person’s credit score. But they could also signal a much bigger problem: damage to the brain from Alzheimer’s disease.

Families often miss the early warning signs of Alzheimer’s in a loved one. Symptoms may not start to show until the disease has progressed to later stages, at which point early intervention treatments are less effective and the financial consequences can be greater.

But a new study suggests that, for older adults, a credit score decline could signal cognitive decline. It adds to a growing body of research that links money problems to dementia.

Catching Alzheimer’s early is crucial from the standpoint of mental capacity, elder care, and estate planning.

Financial Deficits Mirror Memory Deficits in New Study

Credit scores start to go down and payment delinquencies start to go up in the years preceding a memory disorder diagnosis, according to new research published by the Federal Reserve Bank of New York.

Led by Georgetown University and supported by the National Institute on Aging, the study (“The Financial Consequences of Undiagnosed Memory Disorders”) found that, in the period leading up to a diagnosis of Alzheimer’s disease and related disorders (ADRD), credit outcomes noticeably deteriorate.

The researchers looked at credit card and mortgage payment histories from Equifax merged with Medicare data. Among patients diagnosed with ADRD, an increase in missed credit card payments began more than five years prior to diagnosis, while mortgage delinquency started three years prior.

Lead researcher Carole Roan Gresenz called the results “striking in their clarity and consistency.”

“Credit scores consistently decline, quarter by quarter, and probability of delinquency consistently increases as diagnosis approaches,” said Gresenz. “Our findings substantiate the possible utility of credit reporting data for facilitating early identification of those at risk for memory disorders.”

Finances Can Help to Catch Alzheimer’s Before It’s Too Late

It is becoming increasingly clear that financial missteps like missing routine bill payments could be an early predictor of Alzheimer’s that helps to detect the disease before major memory problems are apparent.

Georgetown’s Gresenz published research in 2019 that similarly showed compromised decision-making in money management can predict an Alzheimer’s diagnosis.

“Significant limitations and rapid declines in financial capacity are a hallmark of patients with early-stage Alzheimer's disease,” the abstract for that paper states.

In 2020, Johns Hopkins researchers released a study that discovered Medicare recipients later diagnosed with dementia are more likely to miss bill payments up to six years before a clinical diagnosis.

Alzheimer’s affects an estimated 6 million Americans, most of them age 65 or older. It remains the top cause of dementia in older adults and the seventh leading cause of death in the United States.

The results can be devastating as the disease progressively destroys memory and functional skills. But its exact cause is unknown, and diagnosis is notoriously challenging in the initial stages.

Money matters may be a leading indicator of Alzheimer’s because financial management is cognitively challenging, a specialist in geriatrics and memory care at UPenn told KFF Health News.

Even mild cognitive impairment can lead to financial issues when there are generally no other signs that a person is developing Alzheimer’s. In fact, financial problems are a common reason why loved ones are initially screened for dementia.

But by then, it might already be too late to avoid major money mistakes. For example, one Pennsylvania Alzheimer’s sufferer had her home foreclosed on due to missed mortgage payments. Her daughter only realized how bad her mother’s memory had gotten when she noticed abnormalities such as unpaid bills and strange cash withdrawals.

Unopened and unpaid bills, money missing from a bank account, difficulty balancing accounts, and new, unexpected purchases are some of the money-related signs that should be monitored in people who have dementia or may be developing Alzheimer’s, according to the National Institute on Aging.

Missed payments could be a sign that an older adult is developing Alzheimer’s. Stay on top of their credit reports and reach out to a local elder law attorney if you need legal advice about how to protect them.

The Importance of Early Alzheimer’s Detection

Many Alzheimer’s cases are not caught until they’re in the middle and late stages. But early detection, which may be easier if family members are paying close attention to an aging loved one’s bank statements and financial records, can help to stave off the worst consequences, both physical and financial, of the disease.

Although there is currently no cure for Alzheimer's, there are FDA-approved drugs that can help to slow its progression and lessen symptoms. However, these therapies work best when the disease is in its earliest stages, before permanent brain damage has occurred.

Early detection is also important for families caring for older adults with Alzheimer’s disease. It can help to set realistic expectations, plan together, and avoid potentially costly financial mistakes.

Georgetown researcher Gresenz notes in her 2019 paper that financial miscues during early-stage Alzheimer’s can reduce a patient’s net wealth. This can impact the ability to pay for care in the disease’s later stages.

One reason why Alzheimer’s may be linked to lower net wealth is financial exploitation. Cognitive changes associated with early-stage dementia has been shown to not only make individuals more susceptible to compromised financial decision-making on their own, but also make them more vulnerable to financial abuse and fraud.

Work With an Attorney

Estate planning for a loved one suffering from Alzheimer’s or dementia should include preparing for their long-term care and health needs, arranging to manage their finances and property, and naming another person to make financial decisions on their behalf using a power of attorney.

But executing estate planning documents requires having the mental capacity to do so. And if somebody has Alzheimer’s, they may lack the ability to give their consent. That’s why it’s crucial to have these documents in place before they’re needed — especially in cases where Alzheimer’s has been diagnosed or is suspected.

Many older adults living with early-stage Alzheimer’s still have the legal capacity to make their own decisions, but this might require a third-party assessment and attorney assistance.

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Study Links Credit Scores and Alzheimer’s Disease in Seniors