Retirement is a time to enjoy life to the fullest. While money matters may not be as exciting as traveling the world or painting a masterpiece, they’re still important. And your credit score is a crucial number to stay on top of. Doing so stands to benefit you in a myriad of ways during your golden years.
Retirement and your score
Though the act of retiring doesn’t affect your score, that doesn’t mean your borrowing power will remain the same. That’s because your income may drop in retirement and affect your debt-to-income (DTI) ratio as a result. Your DTI is one factor lenders consider when determining your creditworthiness. While you may not be able to raise your retirement income, you can pay down debt to improve your DTI. As well, making on-time payments and reviewing your credit report for discrepancies can also aid your credit journey.
A good credit score opened the doors to favorable loan terms when you were younger, and it can do the same for you in retirement. Maybe you’re ready to purchase your dream home and live out your life in style. Or, perhaps you have the means to upgrade your vehicle to one more conducive for road trips. Whether the money is for a home, car, renovations, or continued education (you’re never too old to learn!), a loan can put these dreams and more in reach. Plus, a solid score works in your favor as a borrower. Lenders will reward your creditworthiness with potentially lower rates and better terms on loans.
Want tips for improving your credit score and printable worksheets to plot your strategy for doing so? Click here to access our free, downloadable eBook, The Ultimate Beginner’s Guide to Credit Scores. Presented by General Electric Credit Union (GECU), this resource aims to demystify this important number so you can succeed no matter what stage of life you’re in. Retirees can also benefit from our catalogue of on-demand retirement webinars. From Social Security benefits to elder law, we give you the information you need to thrive.