4 Reasons Why Your Credit Matters When You Retire

Your score can affect you long after you stop working

by Laura Sinberg
credit in retirement image
Photograph: Aquir/Shutterstock.com

The importance of having good credit goes far beyond qualifying for cards with high limits. Your score can affect just about every aspect of your life—even after you retire, says T. Rowe Price senior financial planner Judith Ward.

It’s a safety net
You don’t want to take on debt in retirement, but emergency bills may make it necessary. Your debt will be cheaper in the long run if your credit score is high (because you’ll have access to lower rates).

You can reinvent more easily
If you dreamed of starting a side business, going back to school or doing anything else that might require a loan, a good credit score will ensure the most favorable rates.

Travel perks will be cheaper
Retirees do a lot of traveling. With good credit, you’ll pay less for access to the best reward credit cards and be able to rack up airline miles and other travel bonuses offered by credit card companies.

Refinancing will be an option
About half of people in their late fifties and early sixties still carry a mortgage, according to the Federal Reserve Survey of Consumer Finances. With a good credit score, you can refinance—and cut your payments significantly—if rates go lower.

Next: 7 Pros and Cons to Refinancing Your Home

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First published in the May 2014 issue

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