The best ways to maintain your credit score in retirement
So let’s get down to the facts: How do you maintain your credit in retirement? You continue the same financial habits you did while working.
These habits include paying in full and on time and several other positive practices. Here are a few steps you can take to maintain your credit score’s impact on retirement:
- Always pay on time: Making on-time payments is a huge step in ensuring you have a clean credit report. Even one late payment might cause your score to drop points. If you miss a payment, make a delayed payment, or have your balance sent to a third-party collection agency, it can severely damage your score long-term.
- Keep your balances low: A good rule to go by is to utilize less than 30% of the credit you’re offered. For instance, if your limit is $10,000, you should never have over a $3,000 balance. If you’re worried about keeping this balance, there are two things you can do. First, you can keep it low by making recurring payments so your balance doesn’t exceed 30% of your line of credit. Second, you can ask your credit card company to increase your credit limit.
- Avoid closing accounts with long histories: Even if you’re not using a credit card, keep it open if it doesn’t have a fee. This increases the average age of your accounts and can help increase your credit score.
- Maintain active credit accounts: A credit score’s impact on retirement could mean making a small purchase periodically. Active accounts help raise credit scores a little more than cards that aren’t used.
- Review your credit report: While checking your credit report won’t impact the score, being aware of what’s on it is helpful for a few reasons. First, when you know what’s on your score, you’ll also be able to spot any possible discrepancies, like fraudulent activity. And second, you’ll be keeping your financial health in mind. This will make making financial decisions that can impact your credit score easier.
We hope this article on how a credit score’s impact on retirement can help you was helpful. For another interesting read, we also suggest: 6 Simple Budget Tips for People Who Don’t Make Enough Money
