Jean Chatzky
Do one thing: If you are retired and haven’t been keeping up with your credit score, do yourself a favor and check in on the three-digit number. You can find it on credit card bills, some mortgage payments, and often through credit reporting agency websites, as well as through Savvy Money.
One of the great things about a well-funded retirement, in theory, is having some newfound freedom to do what you want when you want with your time and money. This may be a time in life when your mortgage is paid off. Maybe your car is as well. Do you even need to worry about your credit score anymore? Ummmm, yes.
Your Score is More
The reality is your credit score is used for much more than determining creditworthiness for a mortgage or auto loan these days. For better or worse, your credit score also comes into play for things like:
- Insurance policies – everything from life to home and auto – in most states.
- It can also influence your ability to rent an apartment if you don’t happen to own a home or you suddenly find yourself out of the house you shared with a longtime partner. (It happens.)
Debt Continues to Follow You
Plus, being retired doesn’t mean your high-interest credit card debt simply vanishes when Social Security benefits kick in. A recent report from the Employee Benefit Research Institute (EBRI) showed that in 2024, 68% of U.S. retirees with debt said it was outstanding credit card debt. The same survey found that 31% of Americans who have retired said their spending was either “much higher” or “a little higher” than they could afford in 2024. Keeping your credit score as high as possible is the key to keeping the interest rates on that debt as low as you can.
Consider the Real Estate Market
And, even if you’ve paid off your home, there’s no predicting that you won’t be in the market for another one. Some retirees downsize. Others decide the time is right to buy a second home. For many reasons, your credit score is worth your continued attention.
Good Credit Can Keep Options Open
Certified financial planner Nick George, owner of ClearMind Capital, says he’s well aware of the misconception that once you retire and your big debts are paid off, credit no longer matters.
“The truth is,” he says, “credit isn’t just for borrowing. It’s also a measure of flexibility. Retirement isn’t the finish line; it’s the start of a new phase, ideally filled with flexibility and choices. Good credit keeps those options open.”
So, whether you want to finance a car or secure a personal line of credit, or just continue to rack up points and perks with a rewards credit card, your credit score can still play a major role in how much you have to pay for the money you borrow.
The Curveballs Keep Coming in Retirement
No matter how secure we think we may be, things are bound to come up that we aren’t always prepared for, explains George. Such as? “Unexpected home repairs, a desire for big ticket bucket list items, or even helping out family members.”
Samantha Mockford, CFP, an associate wealth advisor with Citrine Capital in San Francisco, shares a few more reasons retired individuals still need to mind their credit scores.
“Retirees may be less likely to apply for a mortgage or auto loan, but they are way more likely to fall victim to fraud and more likely to have expensive medical bills,” Mockford notes. “Good credit helps in both those situations.”
If you have a good credit score, she explains, (credit report) anomalies can be caught more easily and quickly, and creditors will likely be quicker about resolving any issues that may arise. Plus, medical expenses likely will only increase as we age. If you find yourself in need of a medical payment plan if you incur a hefty medical debt, you’ll want to have good credit to earn more favorable loan terms.
Gray Divorces Continue to Rise
While the divorce rate for younger Americans has declined in recent decades in the United States, the number of divorces among those age 65 and older, often known as gray divorce, has tripled, federal data shows.
“You never know what life may hold,” says Charles Kyle Harper, CFP, a financial advisor with Harper Financial Planning. “I had clients who had been married for 37 years who sat in my office and told me they were getting a divorce. One of the spouses had very little credit history and would struggle to qualify for a loan on her own.”
The Bottom Line? Be Prepared for Anything
While no one wants to think about worst-case scenarios, it’s far better to be prepared. If you happen to retire while you are in a relationship and then your marriage ends, either because of death or divorce, you could find yourself in a completely different place financially than you ever planned for. Maintaining a solid credit score can only help when life takes unexpected twists and turns.
With reporting by Cassandra Andrews
Chris O'Shea
