3 Credit Tips for Retirement

Whether you have just entered the working world or have been at the same job for several years, you should give some thought to retirement. Relaxing and living up your golden years can be a joyful experience after years of hard work. But that blissful attitude can quickly diminish if you have not adequately prepared yourself. These credit tips will help you on your quest to prepare and live out your retirement:

Using credit sparingly
Checking your credit frequently by either accessing your credit report or looking at bank statements is always a good idea, but it becomes even more important when you reach retirement age. As your retirement begins to approach, your goal is to reduce your debts to a manageable level. This can be attained by making all your regular payments and using your credit card sparingly. Using a credit card sparingly will not only assist in keeping your balance at a respectable level – it will also help improve your credit score. Credit is still important to build up during retirement, so don't forget about using your card every now and again.

Revolving credit
As you get older, you may have to be creative with how you pay for things. This can be especially true if you have not saved up enough for a retirement fund. One of the ways you can help pay for things is by using different forms of credit or revolving credit. This option is a mix of credit cards and installment plans, such as a loan for furniture or a television. Revolving credit is something you can look into, but be sure to still use it sparingly.

Forget co-signing
Co-signing is a way to assist a trustworthy person in getting a loan or a new credit card, but you may want to pass on this option come retirement. Co-signing can add more debt to your account and could possibly knock your credit score down a few points. Your credit score will take a hit because your utilization ratio will go up. Because you are using credit sparingly, your utilization ratio is currently low. If you tack on more debt, your utilization ratio will go up, which in turn will hurt your credit score. It is nice to help out someone, especially if they themselves are good with credit, but co-signing a loan or credit card is not in your best interest.