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How to Maintain a Good Credit Score After Retirement





Having good credit is important, even in retirement. If your credit isn’t where you would like it to be, try to get it in shape before you retire. If you’re already retired and your credit score is lower than you’d like, there are several things you can do to boost it. 

Why Seniors Should Care About Credit Scores
If you decide to downsize, having good credit will be important, whether you buy a new house or rent an apartment. If you want to take out a home equity loan to make repairs to your house or borrow money for a new car, you’ll have a better chance of being approved and getting a competitive interest rate if you have a high credit score.

In addition, you will still have to pay for homeowners or renters insurance and auto coverage after you retire. In most states, insurers consider credit scores when setting premiums. 

How to Improve and Protect Your Credit Score
If you haven’t yet retired, use the remaining time before you stop working to get your credit in order. Pay any past-due bills and work on paying off, or at least reducing, your outstanding credit card balances. That will lower your credit utilization ratio, or the percentage of available credit you use, and boost your credit score. 

Once you have paid off credit card balances, don’t close the accounts. Your credit score is based on several factors, including the length of your credit history and the percentage of available credit you use. Closing accounts would shorten the average amount of time your remaining accounts had been open and remove those accounts’ available credit from your credit utilization calculation. That would increase the percentage of available credit you were using and could hurt your credit score. You should continue to use credit cards, but keep the balances low or pay them off each month.

Check your credit reports at least once a year for signs of identity theft and errors. Look for any accounts you didn’t open, bills you paid off that are still listed on your report, and other inaccuracies, and dispute them. 

Financial scams are common, and unfortunately, criminals often target senior citizens. State attorneys general, the Consumer Financial Protection Bureau, AARP and local news outlets publicize information about known scams. Monitor those sources. 

If someone calls or emails you claiming to represent a company you do business with and the individual asks for your personal information, don’t provide it. It’s probably a scam. If you think the person who contacted you might really represent a business where you have an account, call the company’s customer service number and ask for confirmation.

Good Credit Is Still Important in Your Golden Years
Many people think that maintaining a good credit score isn’t important after they retire, but that’s not true. Your housing options and ability to borrow money and get insurance all depend on the strength of your credit.