![Retired? You Still Need To Maintain Your Credit Score](/img/retired.jpg)
Why does your credit score still matter after you retire? If you are still paying off your mortgage loan, you might want to refinance that loan one day to one with a lower interest rate. You'll need a solid credit score to do this.
Even if you've paid off your mortgage, you might want to move someday. Maybe you want to downsize, move to a warmer climate or relocate closer to your grandchildren. If you sell your current home for a high-enough price, you might not need a new mortgage. But if you don't, you'll need a new home loan. Having a high credit score will boost your chances of qualifying for the lowest interest rate on your new mortgage.
You might even want to apply for a new credit card that provides rewards for travel. You'll need a solid score to nab that new card.
This all begs the question: How do you keep your score solid during your retirement years?
Stay credit active
To even have a FICO credit score, your credit reports need at least one account that has been updated or reported to the credit bureaus during the previous six months and one account that has been open for six months or longer.
In other words, you need to stay credit active. This could be more of a challenge if you aren't making monthly auto or mortgage loan payments.
Fortunately, making payments on your credit cards will keep you credit active. Your best move is to charge small purchases during the month that you can afford to pay off in full on or before your card's due date. These payments will be reported to the three national credit bureaus and will keep you credit active.
Make your payments on time
Next, make sure to make your monthly payments on time. Certain payments — including those on mortgage, personal and auto loans and on your credit cards — are reported to the three credit bureaus. If you make them on time, that helps your credit score. If you pay them 30 days or more past their due dates, though, that could cause your credit score to drop by 100 points or more.
Don't run up too much credit card debt
The more of your available credit card debt that you use, the worse it is for your credit score. It's best to pay off your entire balance on or before your due date. But if you can't do that, pay down as much of your credit card debt as you can. The more you pay off, the better it is for your credit score.
By following these steps, you can keep your FICO score strong even in your retirement years. If you need to apply for new credit or a loan, you'll have increased your chances of qualifying for the best products at the lowest interest rates.
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