As you reach your retirement years, you will probably notice that your financial priorities begin to shift. You might spend less on transportation, because you no longer commute to work, but more on hobbies to fill your time. You might spend more on health care, but less on clothes or restaurant lunches. In other words, a changing lifestyle means changing priorities.
Either your home and car are paid off, or you don’t expect to make those large purchases ever again. So along with these shifting priorities, you might feel that your credit rating isn’t nearly as important as it used to be. But this would be a mistake.
Older Americans still borrow money. Maybe you don’t plan to purchase another car or home in your lifetime, but emergencies can necessitate a loan. You might need to take out a second mortgage in order to cover a major roof repair, for example.
Your credit rating affects more than you think. Aside from your ability to obtain a mortgage, your credit rating can affect the rates you pay for auto insurance. It might even impact your ability to get a part-time job, in the event that you decide to boost your retirement income through employment.
“Gray divorce” is becoming more common. It’s not something most of us want to think about, but divorce in the later years is not exactly rare. In the event that you find yourself suddenly single, you might need to purchase another home or car. You will wish you had maintained your credit rating!
So have we convinced you that you need to protect your credit rating even after you retire? Take the following measures to build and maintain a solid credit history.
● Use a card – but pay it off each month. Keeping at least one credit card helps you to build a credit history, and some cards provide valuable perks. Just don’t charge more than you can afford to pay off each month.
● Don’t co-sign loans. Tell the kids and grandkids “no”. If they drop the ball on those car payments, you will be responsible for them.
● Keep your card secure. Unfortunately, older people are often targeted for theft. Keep your card in a secure location.
● Watch for ID theft. Examine your credit report at least once per year, and report suspicious activity. ID theft can ruin your credit score.
● Keep balances low. If you do carry a balance on a credit card, keep it below 30 percent of the credit limit.
As your needs and priorities shift, so should your budgeting and spending habits. For more financial planning advice, call us to set an appointment. We specialize in helping retirees identify financial needs and make adjustments along the way.
