The benefits of maintaining good credit include looking more reliable in the eyes of prospective employers and securing lower mortgage interest rates when buying a home. Do individuals stand to benefit significantly from maintaining good credit into their golden years?
Senior citizens tend to have the best credit scores of any consumer demographic. That could be a byproduct of years of financial discipline.
Buying a home is often considered a big financial step forward for young people, but that doesn’t mean aging men and women are completely out of the real estate market. Maintaining strong credit after retirement can help homeowners who still have mortgage debt get better terms if they choose to refinance their mortgages. Even seniors who have paid off their mortgages can benefit from maintaining good credit if they decide to downsize to a smaller home but cannot afford to buy the new home outright.
Retirement is often associated with travel, recreation and leisure. Such pursuits can be more affordable when seniors utilize rewards-based credit cards that help them finance vacations, weekend getaways and other expenses associated with travelling. Seniors who maintain strong credit ratings into their golden years may have more access to the best travel-based rewards cards than those whose credit scores dip in retirement.
No one knows what’s around the corner, but savvy seniors recognize the importance of planning for the unknown. The COVID-19 pandemic seemingly came out of nowhere, and among its many ripple effects was the sudden job loss experienced by seniors. Unforeseen medical expenses also can compromise seniors’ financial freedom. Maintaining a strong credit rating into older adulthood can help seniors navigate such financial uncertainty more smoothly. Such a strategy can help seniors secure low-interest loans or credit cards to help them pay down sudden, unforeseen expenses without getting into significant debt.
The importance of a strong credit rating is often emphasized to young people. However, a strong credit rating can be equally beneficial for seniors.