How you can benefit from a strong credit score during retirement

How you can benefit from a strong credit score during retirement

November 8, 2016
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So you’ve taken care of your credit score your entire life. You always paid your bills on time and in full, you were a responsible credit card user and you always did everything in your power to improve your credit score. But you’re retired now. And you’re wondering if it was all for nothing.

Retirement means a change of lifestyle. No more going to work each day and probably no more mortgage. But your credit score is still going to stay with you. Yes, it’s not a good idea to ignore your credit score, and yes, a good credit score will also help you during retirement.

Here’s how you can benefit from it:

1. Refinancing a mortgage

Just in case you didn’t manage to pay off the mortgage on your home by the time you entered retirement, a good credit score will allow you to refinance that loan at better rates. The same goes if you find yourself in financial difficulties and need to access your equity through a cash-out refinance. Having a good score will help you make the best possible deal.

2. Saving money

Just because you’re retired it doesn’t mean that you won’t spend money anymore. You’re going to spend, but you can save by using rewards credit cards. And the best rewards credit cards are offered to those people with very good scores.

3. Helping out a family member

If a family member encounters financial difficulties, you will be able to help him out, either with a credit card cash advance, line of credit or a co-sign loan. A good credit score will allow you to access an important amount of cash at a low interest rate.

4. Emergencies

There will always be emergencies. You might get sick, your car could break down, or you may need to repair your home. This things happen, but you can fix them if you have the money. By keeping a good credit score, you will always have a Plan B to help you out when in need.

5. Staying on top of insurance costs

It doesn’t matter if you’re retired or not, you still need insurance. Insurers look at your score when determining your premium rates. If it’s good, they’ll consider you more responsible and will offer you lower rates, thus allowing you to save money.

6. Hobbies

Last but not least, retirement is also about hobbies. You have way more time for them now. And, after working hard for so many years, you deserve to relax and finally do what you want. Unfortunately, some hobbies tend to cost a lot. But this is not a problem for a citizen with a good credit score. A good credit score will allow you to access inexpensive credit as a source of capital whenever you need it.

Thomas Hookton

Thomas Hookton is a finance journalist, history buff and science fiction connoisseur. Hit him up via email.

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