Mistakes to Avoid during Retirement

When approaching retirement you’re likely to think more about wealth preservation than credit scoring. Your borrowing days may be well behind you but even after retirement, your credit score still matters for a variety of reasons. Credit scores are affected by how you manage your liabilities and how much debt you owe. If you keep making your payments on time, your scores will continue to benefit. If retirement leads to a lack of income such that you start making late payments, then your scores will suffer.

Here are a few mistakes to avoid when those golden years arrive:

1. Thinking Credit Scores No Longer Matter
Even after you retire it is still very important to maintain good credit scores. Credit scores still have the ability to impact many areas of life after retirement including your ability to refinance your mortgage if rates drop, auto loan approvals, credit card approvals, and even your insurance premiums.

2. Closing Accounts
Closing credit card accounts can be a very bad idea at any age. When you close a credit card account it has the ability to increase your credit card debt-to-limit ratio (the relationship between your credit card balances and the limits on your open credit card accounts). If you close unused credit cards and that ratio increases then your credit scores will almost certainly drop.

3. Failure to Monitor Your Credit Reports
It is important to protect yourself from credit errors and identity theft in retirement. Credit report errors and identity theft both have the ability to drop your credit scores quickly. You can get a FREE copy of your credit report each year from CRIF NM. After all whether you’re 25 or 75, life is always better with good credit.

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