If you're already a homeowner and you have all the credit cards you'll ever need, you're probably not thinking much about the information in your credit reports.
But experts warn that retirees and older workers need to maintain solid credit ratings.
"Seniors and those approaching retirement must be mindful that good credit matters at all stages of life," says Barrett Burns, president and CEO of Stamford, Conn.-based VantageScore Solutions.
One major reason to keep your credit in great shape is that you may face a surprising credit check down the road.
Here are four credit checks older Americans and retirees should anticipate.
1. You decide to reenter the workforce
After retirement, some people find themselves wanting to stay busy with a part-time job. Others are forced to go back to work for financial reasons.
It's hard enough to overcome potential ageism in the workplace, but bad credit also can be a major hurdle to landing a job.
See also: Can a credit screening cost you the job?
Employment-based credit checks have become commonplace. Nearly half of U.S. employers perform credit checks on some or all job applicants, according to a study by the Society for Human Resource Management.
So if you have poor credit, that job you want may be out the question. Avoid that pitfall by managing your credit wisely before and during retirement.
2. You want to buy a car
Maybe in retirement you've decided to finally reward yourself with your dream car and to take out a car loan to buy it. Or, even if you don't want a high-end car, you could find yourself needing to finance another vehicle simply because your older one has finally given out.
"People buy cars until they don't drive any more," says Kimberly Foss, a certified financial planner and founder of Empyrion Wealth Management in Roseville, Calif. "For many people, even a high net-worth person, it might make more sense to finance a vehicle."
Most consumers looking to buy new cars, especially retirees, would be better off preserving their cash and investing it or even using those funds for needs, such as housing, health care, food or living expenses, Foss says.
Ways to Save On Everything: From health costs to housing
When seeking financing, expect a representative from a car dealer or an auto finance company to pull one or more of your credit reports from one of the country's three main credit reporting agencies — Equifax, Experian or TransUnion.
In today's marketplace, consumers with excellent credit can often get auto financing at interest rates as low as 1 to 3 percent.
"But if you don't maintain good credit, you're not going to get those advertised rates," Foss says.
3. You need a home improvement loan to accommodate health needs
Many retirees prefer to "age in place," meaning they want to stay in their homes during retirement and not move to a nursing home.
But staying in place could require costly renovations to your home. These include remodeling tubs and bathroom floors to make them slip-resistant, adding a room for an aging parent who comes to live with you or widening doorways to provide wheelchair access.
To be able to pay for these upgrades, you might need to borrow from a lender that will review your credit record.
4. You want to buy a second home or vacation property and need a mortgage
Finally, another housing-related loan — and thus a credit check — would be necessary if you decided to purchase a vacation property and you didn't have the funds to buy the house outright.
Even though a second home may not be in the cards today, you could very well change your mind about such a purchase in the years to come, and that may require a mortgage.
The point of all this is to remember that, as you get older — even if you pay off traditional debts like primary mortgages, student loans or credit card bills — you should still work to keep your credit rating in top shape because you never know when someone might pull your credit report.
"Many who no longer need to access credit regularly — because their children are out of the house or their mortgage has been paid off — eliminate their use of it altogether," Burns says.
That eventually can lead to a credit report becoming so "thin" that it cannot generate a credit score. (A credit score is a three-digit number that tries to predict the likelihood of you repaying your debt and is used by creditors when deciding whether to give you a loan and what interest rate to charge.)
"To keep credit strong and active, and to avoid becoming one of the credit invisibles, we recommend that all individuals keep at least one credit card active and paid in full each month," Burns says.
Foss also recommends that people do as she does: She pulls her credit reports once a year on her birthday. "Just go to annualcreditreport.com and get your credit reports free of charge. Then review them for errors and make sure there are no mistakes," she says.
"That's also important because of all the identity theft now taking place," Foss adds. "You want to stay on top of your credit — and make sure it doesn't get ruined by someone else."
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