As people approach retirement, they often enjoy the best credit scores of their lives, given their long credit histories, and lower debt as they ready themselves to live on fixed incomes.
But after retirement, scores can slip, even if they have a perfect payment record.
Living on a fixed income isn't the problem, since credit scores do not take income into consideration. What the scores do calculate, however, is credit activity. When you retire, you are less likely to apply for a mortgage or use credit cards, and this can cause your score to at dip.
According to The Wall Street Journal, credit scores are still important to retirees. Scores are used for premiums on insurance and health care, for apartment rentals, assisted living. So you want to keep your score as high as possible — at least within the crucial 660-780 range.
The way to do that is to use credit cards and pay the balance in full at the end of each month. Going in debt is rarely an option on a fixed income, since rising interest rates can quickly increase debt and make it unmanageable. But using a credit card — and paying it off at the end of the month — may help keep your score high.
Never close old accounts, even inactive ones. Consider taking an auto loan, even if you can pay for the car in cash. You might pay it off early, if there is no penalty, but the loan could boost your mix of credit and therefore improve your score.
