Credit Score Before Retirement – Do I care?When you are getting ready to retire, your credit score is probably low on your list of concerns. After all, your days of borrowing are behind you. But, there are still many reasons that maintaining a high Credit Score Before Retirement can be beneficial in your retirement years.
High Credit Scores Save You MoneyIn retirement, you want to make every dollar go as far as it can to keep you comfortable. Having a high credit score means paying less for many services. Better mobile phone plan rates are often possible with good credit. Insurers will charge you less to insure your car or home. You can also often avoid or reduce costly deposits for utilities if you can show a proven history of paying your bills in full and on time.
Your Current Creditors May Check Your ScoresCredit card companies occasionally check their clients’ credit scores to make sure that they are still in good financial shape. If your credit card company sees that your score is slipping, it can result in a reduction in your available credit, an increase in your APR or even them declining to renew a card that you currently have. On the other hand, if creditors see your scores go up, you may be eligible for higher credit card limits or a lower rate.
You Will Have More Attractive Chances to RefinanceIf you still owe money on your mortgage or an automobile loan, refinancing can save you thousands of dollars. This allows you to dedicate less of your retirement income to paying off loans and more of it to enjoyable retirement activities such as hobbies, travel and restaurant meals.
You’ll Have Better Options if You Want Credit in the FuturePeople are living longer than ever and staying more active in retirement. If you see a good deal on a rewards credit card, good credit will allow you to take advantage. For instance, many airline miles cards periodically offer large sign-on bonuses. Even if you have the money in the bank to pay out of pocket for airline tickets, scooping up the deal can mean saving several hundred dollars on a well-deserved vacation. Just make sure you pay all bills in full and on time to avoid costly interest charges.
How to Increase Your Credit ScoreIf you already have a high credit score, you won’t have to do anything different to improve your score. As the average age of your oldest accounts increases, your score will naturally go up, as well. If your credit is less than sterling, there are a few ways to improve it before retiring:
- Pay off any installment loans. If you owe money on a car, furniture, or any other item subject to monthly payments, work to eliminate that debt. The fewer loans you have, the better your score.
- Keep your credit card balances low. Creditors like to see a low level of utilization compared to your available revolving credit.
- Check your credit reports regularly. Many reports contain errors that can reduce your score.
- Don’t close old cards. The length of your credit history is a factor in your credit score.