You might think that once you reach retirement, your credit score is just one of those things you get to stop worrying about. While it’s true that most retirees won’t be applying for mortgages, it’s not true that you don’t need to maintain a decent credit score. What if you want to apply for a car loan? What about credit cards? You certainly won’t get the lowest interest rates and best rewards programs possible without a good credit score to back you up.
A low credit score can also hurt you if you want to downsize to an apartment, or even move into a senior living facility. You might need a solid credit score to qualify.
Why it’s hard for retirees to build credit
According to FICO, to have a credit score, you must have at least one credit account that is at least six months old. You must also have at least one account that has been updated by a creditor or lender during the last six months.
If you aren’t paying a mortgage, paying off an auto loan, or using credit cards, you might not meet any of these requirements. This might lead to you becoming what FICO calls an “unscorable,” a consumer who has no credit score at all.
Fortunately, there are ways for retirees to continue building credit. They require the same good financial habits you’ve been practicing before retirement.
Use the credit cards you have
You might prefer paying for items in cash. Instead, make small purchases throughout the month with your credit card. If you pay off your entire card balance each month, you’ll continue to boost your credit score. (See also: How…