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Just because you retire does not minimize the importance of your credit. How you manage finances during retirement can impact your credit and thus your ability to borrow or increase your pay interest rates.
Your credit reports track your personal history of borrowing and repaying the money, including loans and credit card accounts that have been active in the past 10 years, even if the loans are now paid off in full or the accounts have been closed. They also record major negative financial events, including foreclosures, repossessions, and bankruptcies.
Some retirees whose days of big-ticket financing are behind them make the mistake of concluding they can forget about their credit scores; in the average 30-year span of retirement, some unexpected situations may arise in which a new loan or line of credit could be helpful, and the best options and rates will come with higher credit scores. In addition, credit scores can affect finances beyond new loans and credit card rates. Here are a few ways low credit scores can cost retirees money:
Maintaining a good credit score can ensure a quality of life as well as minimize the expenses listed above. For many retirees, traveling is one of their priorities. One common way to reduce travel costs is good credit cards that specialize in travel rewards, resulting in free flight miles, discounts on hotels, car rental coupons, etc. A good travel credit card with competitive rates is hard to come by if you have a poor credit score. You can maintain and improve your credit score before and after retirement through the following actions:
Just as you pay attention to your creditworthiness while employed, it is just as important after you retire. The good practices you developed before retiring will help make retirement just that much more worry-free.
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