I'm Retired. Do I Need to Worry About My Credit Score?

A mature man leans on his car as he looks at his phone.

In 2023, the average consumer credit score was 715, says Experian. That falls into the category of "good."

But if you're retired, you may not even know what your credit score looks like anymore. And that's actually a big mistake.

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You might think your credit score doesn't matter now that your career has come to an end. But letting your credit score drop during retirement could end up being disastrous.

Why your credit score still matters

It's easy to see why you may not care about your credit score all that much in retirement. By then, you may own your home outright, making it so you don't need a mortgage, and you may not be interested in taking on any new debt.

But you can't assume that you'll never need to borrow money in the course of retirement. And if you let your credit score fall to the point where it's no longer "good," you might struggle to get approved to borrow.

Let's say you end up needing to make home repairs. You may be denied a home equity loan or personal loan if your credit score is in the dumps.

Also, you never know when you may want a new credit card. As a retiree, you may have plenty of opportunities to travel. And the right travel rewards credit card could save you money in different ways, whether it's giving you access to perks like free checked bags or making it easy to rack up bonus reward points for your next adventure. But you may not qualify for the credit cards you want if your credit score isn't in good shape.

Furthermore, let's say you own your home mortgage free but grow tired of having to maintain it and deal with surprise repairs. You may decide you'd prefer to rent a home in retirement so you're able to more accurately predict what housing will cost you. But if your credit score isn't strong, you may not get approved for a rental.

How to keep your credit score in good shape

If you're starting off retirement with decent credit, then a few smart habits could help you maintain a good score and keep your borrowing options open. For one thing, pay all your bills on time. This is a good practice in general, but it can help you avoid a situation where delinquencies go on your credit report, thereby dragging your score down.

Also aim to keep your credit card balances relatively low compared to your spending limit on them. Ideally, you should never carry a balance that's more than 30% of your total credit limit. Of course, this is a good thing to do from a money management perspective, regardless of the credit score impact.

Finally, keep checking your credit report for mistakes. This is a good move to make once every three to four months, and it won't cost you a dime. You can go to annualcreditreport.com to get a copy of your report.

You might think your credit score doesn't matter once you're retired. But it might matter more than you'd expect.

So aim to preserve your credit score if it's good to begin with. And if not, being timely with bills and whittling down credit card debt could do the trick of helping your score rise over time.

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