Importance of Monitoring Your Credit Report Before Retirement

If there’s one area of your finances that’s easy to forget about, it’s your credit report.

Many pre-retirees, as they get older, pay off debts, and accumulate more savings don’t need to finance as many purchases as they did when they were younger. But even if you’ve paid off your mortgage, ensuring a high credit score and a clean credit report is as important as ever.

But credit reports aren’t just for getting loans — they’re a handy early-warning system for fraud and identity theft.

A good rule of thumb is to check your credit reports at least once per year. In particular, be on the lookout for recent changes that don’t look familiar to you as well as “hard inquiries.” This is when a business checks your credit report because they received a new application for credit or services. These can impact your score and stay on your reports for two years or so. They can also be a red flag for people who are trying to use your information illicitly.

In addition, maintaining good credit can come in handy at various times during retirement. For example:

• If you ever choose to downsize, relocate to a new state, or even move to a senior living community.
• If you need to purchase any new insurance policies for yourself or a loved one.
• If you ever need funds for emergencies beyond what you have saved.

For these reasons, don’t neglect your credit as you get nearer to retirement. You never know when you may need it some day.