(FinancialHealth.net) – Life continues changing after retirement. You may need to replace an older vehicle or purchase a new home. Big purchases like these require a healthy credit score.
The goods news is that you can continue to boost your score even after retirement. Staying under the limits on credits cards, avoid taking on additional debt and keeping a close eye on credit scores, retired adults can maintain and even raise their score.
Having a high credit limit doesn’t mean you should use all available credit. In fact, the more you use, the higher your utility rate which is a significant factor in determining your score. Generally, it’s a good idea to only use 30% of the available credit.
The best approach to staying within acceptable utilization rates is to decide in advance how to use the card. For example, will its primary purpose be for gas and groceries because of its cash back rewards? Set the budget amount aside each month in cash so it isn’t difficult to pay off when the bill arrives.
Avoid More Debt
Thirty percent of a credit score is impacted by the amount of debt reported. Individuals with a lot of credit cards and loans are seen as a risk to lenders. For this reason, it’s best to avoid taking on more unless it’s absolutely necessary.
A debt-free retirement has its perks and it’s important to carefully manage the debt you do have. Avoid missing payments, because it’s the quickest way to cause your score to plummet. Paying off credit cards quickly helps raise it.
Check Your Credit Score
When it comes to a strong score, what we don’t know definitely can hurt us. A credit report can shine light on problems we may not be aware of. This makes it easy to take action and address factors that are keeping our score low.
Experian recommends checking your report once a year, currently you can check it weekly. It’s available for no cost at Free Credit Report and checking it does not hurt your credit score. Instead, it’s a chance to ensure that no new accounts have been opened in your name and that all accounts are in good standing.
Raising a credit score doesn’t just happen overnight. However, with faithfulness to keeping debt-to-income ratios low, making payments on debt and keeping a close eye on their report, retirees can steadily make improvements over time.
~Here’s to Your Financial Health!
Copyright 2020, FinancialHealth.net