3 Effective Ways To Maintain Your Credit Scores After Retirement
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When many people retire, they think that most of their financial planning is done and over with. They’ve got their retirement plan set up, they know how much money they will have to live off of each month, and (if they’re smart), they have everything planned out. But what if there’s an emergency? Many people haven’t included any sort of emergency fund or credit if their house is damaged, their car quits, or they face a mountain of medical bills. That’s why it’s very important to maintain your credit after you retire. If you’re unsure how to go about doing this, here are three different effective ways to keep your credit in good standing just in case you need it.

Exercise Your Credit

Good credit has to be used or it will slowly deteriorate. That’s one of the most difficult things for retirees to do: they don’t often have a need for credit, nor do they want to open new lines of credit because they may no longer have the income necessary to pay off big purchases. If you do a credit check report after several years of not using any source of credit, you’ll see that your score and your credit history aren’t quite as impressive as they may have once been. That’s why you should make use of your credit card every now and then. You don’t have to make huge purchases. Instead, put one trip to the grocery store on your credit card each month, and don’t pay the balance off completely until the next month. This way, your credit report shows that you have an active credit card, plus your credit card accounts won’t be closed due to inactivity.

Beware of Identity Theft

Another reason to perform regular credit rating checks is to make certain no one has stolen your identity. The elderly are often targets of identity theft since they don’t use their credit as often. You should check your credit history once a year and you shouldn’t stop this habit when you retire. Go over every item on your credit report to make certain it should be there. You may catch mistakes as well as identity thieves.

One option to keep your good credit score is to have your credit frozen. This means that no one can pull your credit report, which makes it virtually impossible to open any type of credit account in your name. You will receive instructions on how to unfreeze your credit in case you need to apply for a loan or credit card. This can be a good option for those who know they’re not going to need new credit and want to make certain their identity isn’t stolen.

Live Within Your Means

There are a lot of different retirement planning tips out there, but they all come down to one thing: live within your means, which may be much different now that you’re not working. If you want to do a lot of traveling once you retire, make certain the funds are available. Otherwise, you may find yourself relying more and more on credit cards, and that can quickly lead to missed payments if you’re not careful. You don’t want to spend your free years trying to figure out how to get out of debt or, worse, have to try to find a job because you’ve completely blown your budget.

This also means you need to sit down and make a plan before you retire. You need to know how much income you’ll get from your retirement fund and what your social security income will be. Then you’ll need to factor in all of your expenses. Don’t leave anything out. Decide on a monthly shopping budget, add in what you anticipate your holiday and birthday gift expenses will be, and throw in some emergency funds. If all of that adds up to more than you’ll be making, you may need to review some retirement planning tips or accept that you simply can’t retire and live the lifestyle you want. You don’t want to live your retirement by using credit cards; in fact, the ideal situation will be to pay them off before you settle in to your golden years.


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  about 8 years ago
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