Home Credit score Even in Retirement, It’s Wise to Monitor Your Credit Score | Business

Even in Retirement, It’s Wise to Monitor Your Credit Score | Business


Question: Now that I’m retired, my income and expenses are the same every month. So, do I still need to watch my credit score?

Responnse: The Federal Consumer Financial Protection Bureau recommends regular monitoring of credit scores at any age, but especially for seniors who are often at greater risk of identity theft or fraud. Unexplained credit score changes are warning signs of these crimes.

Unfortunately, data breaches have made identity theft and fraud more common by exposing the personal information of millions of consumers. In some cases, criminals steal social security numbers and birth dates. Unlike credit card numbers, this type of personal information cannot be changed easily, making the need for protection against fraud and identity theft all the more important.

There are several ways to protect sensitive information from misuse, including bank and credit card statement verification, fraud alerts with account security freeze options, identity theft protection services and, of course, credit rating monitoring.

Consumers can request a free credit report every 12 months to check for errors or fraudulent entries from annualcreditreport.com.

There are three national credit bureaus: Experian, TransUnion and Equifax. When reviewing your report, question any unrecognized entries and verify that personal and financial information is accurate and complete.

Credit ratings will likely change with large credit purchases, new loan applications, or other available or new access to credit. For example, many retirees are downsizing or adjusting the size of their homes, often resulting in a new mortgage. To qualify for the best rates, make sure your credit scores are optimal for you by correcting any errors on your credit reports, according to MoneyWise.com.

Experian Credit Bureau suggests that one way to easily improve a credit score is to reduce the amount of debt. Avoid making routine payments with credit cards that are themselves revolving credits. By keeping these account balances low, you can avoid getting into debt.

Also, Experian warns that moving balances between credit card accounts does not eliminate the debt problem. Additionally, consumers should regularly scan credit reports to see if any accounts have overdue payments and subsequent charges to eliminate any errors.

To boost credit scores, determine exactly how much you owe and interest rate on each existing credit card or loan, then pay off the highest rate accounts first, depending on myFICO.com.

In retirement, income and bills are often similar from month to month; so, myFICO.com recommends automated payment plans directly from bank or credit union accounts. Scheduling payments to individual creditors can help you get your bills under control and reduce the risk of late payments, which could lead to a lower credit score.

Additionally, AARP suggests that you shouldn’t rush to close old accounts. The age of your oldest and newest credit accounts and the average age of all accounts represent 15% of your credit score. If you don’t pay annual fees on old accounts, it may be worth keeping them open. The longer you’ve had credit, the better your score usually is.

Again, it’s important to monitor your credit score regularly, especially in retirement, to protect against fraud and help you meet any future credit access needs.

Michael Bateman is a retiree who previously worked in marketing and corporate communications.

Michael Bateman is a retiree who previously worked in marketing and corporate communications.