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Retirees can keep their credit healthy by using 4 tips

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By: Good Nelly
on 5th Jun,2013

Retirees have better credit than the young citizens of the country. Their long credit histories make it easier for them to maintain a decent score.
Retirees can keep their credit healthy by using 4 tips


Retirees have better credit than the young citizens of the country. Their long credit histories make it easier for them to maintain a decent score. There is no doubt that young citizens of the country are physically fitter than the retirees. However, when it comes to financial fitness, retirees and baby boomers are much fitter than the younger generation of the country. Most of their debts are already paid off. So, they are in a better financial position than the young people.

Still, it will be wrong to say that retirees don't have any concerns about their credit. It is a fact that they are not dependent on their credit like the young people. However, it is also true that they need good credit score to reduce their auto, health, home, and other insurer premiums. Read along to know about 4 tips that can help retirees and baby boomers to keep their credit healthy and shiny.

4 Tips to keep credit in a good state

Here are the 4 tips that can help the retirees to have good credit.

1. Mix and mingle credit: Retirees can earn extra points by having various types of credit such as mortgage, credit cards, installment loans, auto loans, etc. Credit scoring models reward retirees with various forms of credit as they are able to manage finances efficiently. Some retirees try to pay off their debts and close accounts as soon as possible. This is totally a wrong approach as they'll be left with only revolving credit. Retirees should keep their accounts open and maintain them responsibly.

2. Don't close accounts: One reason why retirees have good credit score is that they have long credit history. If a retiree has properly maintained an account for several years, then that person will have a good credit score.

Most retirees have maintained credit accounts for 20-30 years. Their credit score is bound to be good. Some minor errors will not hurt their credit score much. This single benefit is the main reason to not terminate the old accounts. Once the retirees terminate the accounts, there will be a sharp drop in their credit score. The credit history will become short when the old accounts are removed from the credit report. This will trigger a low credit score.

There is yet another reason why one should not close the accounts. There will be a fall in the available credit after the accounts are closed. The available credit is taken into account while calculating credit score. The lower the available credit, the lesser will be the score.

3. Don't keep the credit cards in locker: Excess use of credit cards is bad. However, it is worse to not use credit cards at all. If the retirees don't use the credit cards at all, then there won't be any credit activity on the credit reports. If there is no activity on the credit reports of the retirees, then their score will never increase in future. Some credit card companies can terminate the accounts if there are no credit activities for several months.


Retirees should use their credit cards once a while. They can purchase just a cup of coffee with the card in a month. That's it.

4. Don't co-sign for your loved ones: Retirees often co-sign on the student loans for admitting their children to good colleges. They want their children to succeed in life. So, they are ready to become a co-signer on the student loans. Although it is a noble thought, yet the retirees should think twice before taking such a step. If their children are unable to pay off the student loan, then the lenders will catch the retirees. Their credit score will suffer due to the increased debt load.

It is best for the retirees to co-sign on the loans after analyzing their financial situations. It is better to ask their children to try for scholarships and grants instead of taking out huge loans.


Lenders often refuse to give money to the retirees as they have zero credit score. These people can generate credit score by using the departmental store cards and gas cards. The retirees often don't have a credit score as their old accounts are in a dormant state. All they need to do is activate those old accounts. This will help them to trigger credit score.


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