Here are some of the most common ways a credit score’s impact on retirement might concern you.
- Higher interest rates: It’s common for credit companies to monitor credit scores for their clients. This helps them modify interest rates. If you have unpaid credit card debt, the company you work with may increase your interest rate if your credit score decreases. They also reserve the right to decrease your borrowing limit if your credit score significantly declines. They might even close it if your account gets flagged.
- Security deposits: Many retirees choose to relocate during retirement. In this case, your credit score’s impact on retirement may mean putting down a security deposit at a retirement community or a new condo. Most rental agencies will run a credit report to decide your eligibility to live in the community and evaluate your ability to pay your rent or bills on time. If your credit score isn’t that great, your new community could ask for a larger security deposit or reserve the right to turn you away altogether.
- Lower insurance premiums: When insurance companies, including your auto or homeowner’s insurance providers, assess potential customers, they take credit scores into consideration. They’ll use information from your credit report to decide what your rate is or if they’ll offer you coverage. The lower your premiums, the more you’ll have to spend during retirement.
…Knowing this tidbit about how a credit score’s impact on retirement affects you will help!
