By: Karen Huang, MSW Candidate, Kovir LLC Intern
A TransUnion survey from 2017 stated only 16% of baby boomers find maintaining good credit to be a top financial priority when preparing for retirement. However, credit may be important to continue to build, even as seniors go into retirement. You may be thinking, homes and cars have already been bought though, so why would credit scores still be relevant?
Let’s take a look:
- Moving 🡪 What if your aging client decided to declutter and realized that a smaller home would be preferable? Or maybe they are looking to move to a different location, due to climate differences, family, or social activities. This could require applying for a mortgage or a loan. Alternatively, having good credit could be a gateway for renting a property, as the landlord may also check their credit.
- Savings 🡪 Are they looking to save more as you spend? Having a higher credit card score could allow them to apply for credit cards that offer higher rewards on daily purchases and travel expenses. So, they should continue maintaining their credit to accumulate points for more rewards!
- Working 🡪 Despite retirement, what if their career interests shift or an exciting opportunity appears? A part-time job, switching careers, or starting a new business could be possibilities! Securing that new job could require credit checks from employers, lenders, or business suppliers.
- Emergencies 🡪 While it may not occur often, what if unexpected circumstances leave your aging client with a need to take out a loan? Situations may include a medical emergency, car repairs, or home repairs, that require immediate access to more funds. Alternatively, it could even involve co-signing or taking out a loan to help family members.
- Insurance 🡪 Does your older adult client currently have or plan on applying for car insurance or life insurance? Credit card scores could affect the costs that they pay. Keeping a good credit score could keep those insurance rates lower and make it easier to get the insurance they want when applying for or switching insurance companies.
With these reasons in mind, don’t forget to remind them to check their credit record!
Credit reports detail out your credit history, which demonstrates how your credit score was determined. Both positive and negative information could drop off a credit report, affecting your overall score. If you’re interested in getting a free credit report, head over to AnnualCreditReport.com or call the number (877) 322-8228. This website is currently providing free credit reports weekly, until April 2022. Stay up to date with what goes into your credit score and make sure your credit history accurately reflects your credit transactions!