4 Ways to Improve Your Credit Score So You Can Retire in Style
If you’re like most people, you spent your 50s working hard and dreaming about all the wonderful things you’d have time for once you retired. Maybe you planned to go on a Caribbean cruise, learn to play the cello, or buy a beach house with a view and spend your days with your nose in a book.
Why Would You Even Need to Improve Your Credit Score After 60?
Now that retirement is approaching, you have time for all those things, but you need to achieve and maintain the kind of credit that will allow you to enjoy the lifestyle you’ve always imagined.
There are plenty of reasons you may need to take out another line of credit, but here are just a few ways having a good credit score can help you:
Refinance Your Mortgage to a Lower Interest Rate
If you purchased your home when rates were high, you may want to refinance your home mortgage to lower your monthly payments. You need to have good credit to obtain a lower interest rate on your mortgage because your credit score directly corresponds to the rate you’ll qualify for with most conventional loans.
Get a Reverse Mortgage
A reverse mortgage allows you to withdraw some of your home equity, but you must undergo a financial assessment to qualify. The assessment will take your credit history into consideration to determine whether you’d be subject to a Life Expectancy Set-Aside for your homeowner’s insurance and real estate taxes. The better your credit history, the lower the chances that you’ll be subject to a LESA that could eat into your retirement funds.
Buy a Car
Whether you’re finally going to buy that convertible, a camper for a cross-country road trip, or something sensible for getting around town, you’re going to need good credit to receive financing on a new vehicle.
Get Better Financing on Medical Bills
Even if you’re perfectly healthy, unexpected medical expenses are a part of life. But if your credit is close to impeccable, hospitals may be willing to negotiate more favorable payment terms with you.
If you’d like to boost your credit score after you retire, there are several steps you can take to get it where it needs to be to support your goals:
Monitor Your Credit Report, and Dispute Errors
One of the most important things you can do to maintain good credit is to monitor your credit report so you know where you stand. AnnualCreditReport.com allows every user one free copy of her credit report from each bureau (TransUnion, Equifax, and Experian) annually. You can elect to check them all at once or check one bureau every four months. If you see any inaccuracies, dispute them immediately.
Lower Your Credit Balance-to-Limit Ratio
Try to maintain a credit balance that’s 50 percent of your credit limit or lower. In this case, it’s actually better to have a higher credit limit because it’s easier to maintain a lower balance-to-limit ratio.
Don’t Close Every Account
It’s a good idea to close accounts you no longer use, but be selective. Old accounts in good standing can actually help maintain a good credit score — even if you don’t use them very often.
Pay Accounts on Time
This may seem obvious, but one of the easiest ways to achieve and maintain a good credit score is to simply pay your bills before they’re overdue on a consistent basis. You can set up automatic bill pay or create calendar reminders to help ensure that you always pay on time.
When you implement these tips, you should start seeing improvement within 60 days. However, it can take up to 24 months to repair your credit score, depending on the length of your credit history — and the most recent 24 months of credit history have the most significant impact on your score.
Sixty is the new 40, only you don’t have the responsibilities and time commitments you did back then. Retirement is the ideal time to pursue your dreams, and a good credit score can help you do just that.
There are so many places left to explore and great things to discover, so wouldn’t you agree that building up your credit is one great way to give yourself the opportunity to live your life to the fullest?