You’ve reached your retirement years. Congratulations are in order. What’s more, you might have enough money to live on thanks to some combination of savings, investments, a pension and Social Security payments. On top of that, you might not be planning to make any major investment, such as a new home, in the future. So who cares about your credit score, right?
Well, this idea is a common misconception among seniors. In fact, your credit report will matter a great deal to you for the rest of your life. Without one that’s above average, you won’t have access to the following financial benefits.
For one thing, your car could stop suddenly working due to age, an accident or another problem. If you want a decent chance of securing an adequate car loan, you must have good credit.
Likewise, the need for an emergency loan might arise. It’s certainly horrible to think about, but household accidents, abrupt illnesses and other crises can happen at any time. To avoid paying an exorbitant interest rate on such a loan, a high credit score is again essential.
The Consumer Financial Protection Bureau reports that 30 percent of Americans who are at least 65 years old make mortgage payments. In addition, the research company Strategic Business Insights has found that about 40 percent of Americans who are between the ages of 60 and 64 have mortgage obligations.
If you’re in one of those groups, you might want to ease your burden at some point by refinancing your mortgage, especially in a time of low interest rates. However ― and you may be noticing a pattern here ― you won’t be eligible for those low rates if you lack an acceptable credit score.
Not to mention, if you ever find yourself in trouble financially, you might wish to negotiate a cash-out refinancing. Doing so should be a last resort, but if you’d like access to such funds, you’ll probably obtain better terms with a strong credit report.
3. Rewards Cards
You might have a longtime aversion to using credit cards. And it’s true that a person who has trouble paying off credit cards would be wise to avoid them altogether.
On the other hand, if you’re diligent about paying your debts, your plastic can actually provide financial relief. That’s because it can give you so many rewards.
For instance, a cash back card will essentially supply you with free money as you make purchases, and those bonuses can really add up over time. Plus, credit card companies often give people small sums of cash just for signing up.
Frequent travelers can especially benefit from credit card usage ― by using platinum rewards cards in particular. That’s because those cards can help you earn free nights in hotels as well as discounts on airfare, rental car insurance, luggage fees and more.
However, if your credit score is poor, it’s unlikely that you’d be eligible for any cash back cards, let alone one at the platinum level.
4. Insurance Rates
It’s wise to keep looking for the best insurance rates you can, even if that means switching companies from time to time. Why spend money on your insurance unnecessarily?
It might not seem fair, but home and car insurance providers might take your credit score into account when they’re determining your monthly rates. Yes, a low score can mean higher costs.
The thinking behind this strategy is that people with good credit scores are responsible individuals and less likely to cause car accidents, leave their homes unsecured, start fires by accident and so on.
So How is Your Credit Score?
At this point, you might realize that you’ve been neglecting your credit score for a while; you might even be starting to worry. Fear not. There are plenty of ways to boost it. To give you just a few examples:
- Always pay all your bills on time.
- Remember that not using your credit cards won’t help your credit score. If a credit card company ends its relationship with you because you’re not taking advantage of its card, it could hurt your credit score. For the same reason, try not to close your credit cards.
- Use your credit cards for small, regular purchases, and make a habit of paying them off on the same day every month.
- Keep searching your credit history for errors. If you have a friend or a relative who’s a financial expert, she might be able to help you find a mistake. Then contact the credit reporting agency that made the error to argue your case.
- Obtain outstanding credit repair services, and watch happily as your score rises.
Finally, you’ll find that good credit brings an additional benefit, one that’s intangible yet invaluable: peace of mind. If your children or grandchildren need monetary help or if life throws an expensive curveball your way, you’ll have the means to improve the situation. After all, you’ve worked hard all your life. You deserve to enjoy your golden years without fearing financial hardships.