This came to my attention recently with a client, they said they weren’t as concerned about their credit score as they used to be since they didn’t plan on borrowing in retirement. And I said that may be true but it’s still important to have a good credit score.
To keep a good score whether you’re 20 or 80 you need to: make timely payments, keep credit balances low and monitor accounts for fraudulent activity. But there are certain issues in particular that older adults should keep in mind, like keeping their accounts open and active. I know it’s tempting to close an old account you’re not using but you’ll lose that credit amount, and that can drop your score. And because the length of your credit history is factored into your FICO score, you generally should avoid closing long standing accounts. And make sure to use cards occasionally otherwise the companies can close them from lack of use, and that can hurt your score.
Keep in mind your credit may be checked for a variety of reasons, whether you’re refinancing your mortgage, downsizing to a smaller home or applying for a part-time job. And for sure your borrowing habits and history are important for you to qualify for a loan or to get lower interest rates, your credit profile can come into play in ways you might not realize.
So bottom line, your credit score continues to be an important part of your financial life into retirement.
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