Many think that once retirement rolls around, we can just stop worrying about our credit. Well there is no way to predict what might happen in the future. A financial crisis in retirement is not out of the question, especially with the amount of illness and disease old age might bring. These types of unforeseen circumstances can lead to retirement funds running low, which can eventually alter your credit score. Keeping up with your credit score is something you will have to do, even in retirement age. Here are some tips to maintain or boost your credit score once you have retired.
- Check your credit report often
It is just as important to keep a constant record of your credit score in retirement as it was when you were working. By keeping track of your credit score, you will be able to see if there are any errors, which might be causing a drop in your credit score. Credit scores are monitored by three credit bureaus known as Experian, Equifax, and TransUnion. Each of these bureaus offers a free annual credit report. In addition, there are popular free websites, such as Credit Karma, which provide you with free credit reporting, easily accessible anytime of the year.
- Continue to pay off old debt
We have all probably heard the saying that some college students will be paying back student loans until the day they die. This is definitely true, and just because you are retired, does not mean you won’t continue paying off old debt. Your credit score can actually be affected by your total amount of debt. Older individuals who have retired might still be paying off a first or second mortgage. It is important for retirees to continuing paying off what they owe, as quickly as possible, in order to keep their credit score in good standing.
- Do not remove paid-off debt from credit record
Many people believe that once an old debt is paid off, and reflects on their credit score, the debt can be removed from the credit report. Paid-off debts that stay on your report reflect on-time payments made in the past, which help to keep your credit score up. This really displays good debt, and will not negatively impact your credit score.
- Be sure to pay bills on time
Continue to keep up with everyday bills by paying on time. Just as mortgages and credit cards are reported to credit bureaus for past due payments, other living expense bills can show up on your credit report, and bring your credit score down. Car loans and utility bills should be paid on time, even in retirement. If you have a retirement account that you use to pay bills, you can always set up a monthly transaction, where each company will automatically remove money from your account and pay your bill on time.
- Continue responsible credit card habits
Keeping a great credit score can be accomplished when you continue to use a credit card responsibly. It will do no good to run up your credit limit, while only paying back the minimum monthly payments. This actually can affect credit utilization, which will show up on your credit report, and can drop your score slightly.
Overall, understand that just because you are retired, doesn’t mean your credit score no longer matters. If you continue to keep up with personal finances, you are sure to have a more relaxing retirement, which is what it is all about!