Your credit score plays a vital role in your financial life, whether you’re saving up to buy your first house or saving up to take retirement in style. Having good credit is important to everyone, regardless of the stage we are in life. And if you reach retirement, it is even more important. With good credit, you have financial freedom, so you don’t have to worry about how you will live the rest of your years. However, overlooking this factor can lead to bad credit and financial problems when you retire. This quick guide will help you stay on top of your credit score and maintain it through retirement and beyond. You can have peace of mind knowing your money will always be there when you need it.

According to FICO, generally, older consumers score higher than younger consumers. If you’re close to retirement and have a high credit score, you’re in good company. More than 30% of Americans aged 60 or older have a FICO score of at least 800.

What’s Credit Score?

Your credit score is a numerical representation of your credit history. This number ranges from 300 to 850, with 850 being the best possible score. The higher this number is, the better it will be for you when applying for loans or credit cards. If you have good credit, lenders can feel comfortable lending to you because they know they will get their money back. But if your credit score is low, they want to avoid giving you a loan because they may not get it back.

How to Maintain and Improve Your Credit Score Before and After Retirement

There are many ways to maintain your credit score before retirement. This includes:

Maintain Active Credit Accounts

Keeping your accounts open is a great way to improve your credit score before retiring. You should keep your accounts open, as it can lower your credit utilization percentage. You should also aim for at least 30% or more of the total limits on all cards in your name.

Pay Down Balances Faster

If you have a high debt-to-credit ratio, pay down balances faster. The higher your debt-to-credit ratio, the lower your credit score will be. A good rule of thumb is never to have a debt-to-credit ratio greater than 30%. If your debt-to-credit ratio is too high, consider paying off balances and opening up new lines of credit instead.

Monitor Your Credit Reports 

Your credit reports are one of the most important factors lenders use to determine whether they will extend you a loan. You must monitor your credit report regularly so that if there’s anything wrong with it (i.e., an identity thief), you’ll know about it and take action immediately. Checking your reports every six months is recommended, but if you’re worried that something may be wrong, you should check them more often.

Keep Old Credit Accounts Open 

In retirement, it’s only sometimes necessary to close old credit accounts. Some can help you maintain a higher credit score than if you closed them. Credit card companies report your usage patterns to the credit bureaus. Closing an account will hurt your score because it reduces the average length of time that you’ve had an account open.

Maintain and Improve Your Credit Score!

A good credit score can significantly impact your finances, which is why it’s so important to be proactive with your credit. There are many ways you can maintain or improve your credit score before retirement.

Do you want to get your credit back on track? At 90PayDex, we specialize in ensuring you have the resources and credit you need for a better financial future.