Does Your Credit Score Matter in Retirement?

When you’re a young adult, everyone, from banks to money bloggers, will talk about how important it is to have a strong credit score. But it seems like once you hit your golden years, the messaging becomes a lot less unified.

And it’s not hard to see why.

Typically by the time you’re ready to retire, you’ve paid your mortgage and you own your cars. When you’re not really buying anything on credit, does a credit score still matter in retirement?
As it turns out, the answer to this question is, “Yes. But maybe not in ways you might expect.”
So before you start throwing credit cards away, here’s what you need to know about the importance of maintaining your credit score through your retirement years.

Why Do Credit Scores Matter?

Along with hefty savings accounts and low debts, a strong credit score is kind of like the Holy Grail of personal finance.


Because, as this article points out while explaining ​what a credit score is​, strong credit opens up a world of lower interest rates, greater borrowing capital, and more financial flexibility on favorable terms.

But when you’re facing retirement with everything paid up, is it worth the effort to keep going?
Yes, it is. And there are three very important reasons why your credit score still matters even after you’ve retired.

1. You Might Get a Job
A lot of people head into retirement planning to spend their days tackling projects and booking cruises while spoiling the grandkids between vacations. However, the reality is that many folks struggle with having nothing to do after spending several decades in the workforce. Meanwhile, there are others who need to work in order to make ends meet.

But the job market just isn’t that simple.

Back in 2015, ​Huffington Post​ published an article on how employers were increasingly requiring applicants to undergo credit checks. Similarly, ​ ​also mentions how jobs in the financial sector as well as many government positions may take a look into your credit history.
A solid credit score can go a long way towards keeping different positions open to you.

2. Unexpected Expenses Could Come Up
When you’re first getting started on your retirement journey, it’s easy to picture yourself driving the same car and living in the same house for the rest of your life with no problems.
But what happens if the basement floods during a particularly heavy storm? What if your furnace gives and needs to be totally replaced?
Expenses like these can happen to anyone at any time. And if you’re retired, sometimes it may make more financial sense to take out a loan and pay it back out of pension benefits or other income sources instead of dipping into your savings.
A low credit score can make a bad situation worse by forcing you to pay higher interest rates or get less than favorable terms compared to someone with a stronger credit score. When you don’t have the benefit of a steady paycheck coming in from the job, those increased interest rates can have a double whammy effect in that they limit your loan options while also putting a more significant dent in your monthly budget.

3. You Could Move
As much as you may intend to keep your own house for as long as possible after retirement, sometimes it’s necessary to downsize.
Fortunately, there are condominium buildings and apartment complexes built specifically for seniors in just about every city. These can be a nice source of community for those who are retired while also significantly reducing your property taxes and your day-to-day maintenance.
However, in order to rent at many of these places, a credit check may be required as a part of the approval process. For obvious reasons, a good credit score can make approval easier during the application process.


Many people see their retirement years as their chance to see the world, travel, and live their dreams without stress or worries. And with everything paid for, it can be difficult to see why a good credit score is necessary as you’re planning to leave the workforce.
But here’s the thing about retirement:
A lot can change from Year 1 to Year 10.

You might sell your house, buy a different car, or suddenly need cash to renovate or make repairs. Even in situations that don’t involve you spending money directly, getting a part-time job may still require you to submit to a check of your credit history.
So while retired folks may not always need a good rating in the same ways that younger adults might, it still goes to show that a strong credit score can help you no matter what stage of life you’re in. And that’s something worth keeping in mind as you plan for your retirement years.

Ian Fleming


This information has been prepared by Ian Fleming who is a financial writer. Opinions expressed in this article are those of Ian Fleming only and do not necessarily reflect those of HollisWealth.
HollisWealth® is a division of Industrial Alliance Securities Inc., a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.

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