When you're kicking back and enjoying retirement, your credit score may be the last thing on your mind. You likely won't have to apply for a mortgage or fill out car loan applications, so why would you need to worry about this three-digit number? The truth is that your credit score can be a handy tool to use during this time. A good score can actually help make your golden years a little more enjoyable and reduce some of your expenses. Here are a few reasons why you should still care about your score during retirement:
Keep insurance rates down
Chances are you're still paying for insurance during retirement. Whether it is for your home or car, having this coverage can help you if your house is damaged or you get into an accident on the road. You could have higher rates if you have a bad credit score. Insurance providers will use your score, along with other factors such as income and marital status, to determine what your insurance rates are. A high score shows that you're responsible and less of an insurance risk, resulting in lower rates.
Better opportunities for credit card rewards
Retirement is a time when you should be trying new things and visiting locales that you didn't have the time to see when you were working. While you are globetrotting, you can use your credit card to get rewards. These perks could be cash, points that will be able to be redeemed for merchandise or air miles to help you get to your exciting vacation spot. Those with a good credit score will have a better chance of getting these rewards, but make sure you are paying off these accounts on time to avoid high rates and debt.
Help refinance your mortgage
Your goal before entering retirement could be to take care of all your debts. But one you may still be paying off is your mortgage. Budgets can be tight during this time, and if you are still paying off your mortgage, you may not have enough money to enjoy yourself. Refinancing can help you reduce your interest rates and make these payments easier, but if you have a bad credit score you will have a tougher time getting approved for a new loan.
Prevent identity theft
This type of crime is more related to your credit report, but it can still have an overall impact on your score and finances. If you become a victim of identity theft, criminals can access your account information and open new lines of credit. If you don't look at your score or report often, you may unknowingly be a victim. By having a credit card with top-notch security features, you can be notified about this crime if it happens and quickly stop it. Even if you rarely use your credit cards during retirement, it is a good idea to check your report every so often.