It would be nice to let things slide. But, yes, you do need good credit in retirement.
It will save you money or hassle in more situations than you may realize. And bad credit can cost you in retirement just as it can cost you during your working years.
Consider these reasons for which it pays to keep a stellar credit score in retirement:
1. Credit checks
Businesses such as insurance companies and service providers don’t stop checking credit once you retire. So, having bad credit can still hurt you in retirement.
For example, a consumer with bad credit may pay more for insurance or have to put down a deposit to receive service from a utilities or cellphone company, says Patrick Whalen, a certified financial planner at Whalen Financial Planning in Los Angeles.
“It is not fun to have a kid working at a cellphone store treat you like a poor credit risk. You’ve worked hard, saved and lived below your means, but it will be necessary to maintain a good credit score in order for you to receive the respect that you have earned.”
2. Financing deals
Say you are making a big purchase like a mattress and want to take advantage of a zero-percent financing offer.
You will need good or excellent credit to get such deals, says Mark Wilson, a certified financial planner at MILE Wealth Management in Irvine, California.
3. Your credit cards
If you want to keep your credit cards the way they are, then you’ll want to keep your credit score up.
“Some credit card lenders will cancel your current card if they see big drops in your credit scores,” Wilson says.
4. Home repairs
Good credit can make it easier for retirees to pay for home repairs, says Becky House, a spokesperson for the nonprofit American Financial Solutions.
“Maybe they will need to repair a roof or replace an appliance on a home they own,” she says. “They may need to use credit to take care of those issues.”