Out of the many possible concerns that may cross your mind as you are approaching retirement, one that you probably aren’t considering your credit score. After all, retirees aren’t exactly known for taking out new loans or credit cards.

Still, there are good reasons to maintain a solid credit score (or even to try to improve it) as you grow older. Here are a few things to consider:

• If you want to move to a long-term care residence, such as a continuing care retirement community, part of the application process typically involves running a credit check.
• You may need to borrow money after all for medical bills. It sure doesn’t sound like fun, but a 65-year-old couple who retired in 2020 can expect to pay up to $295,000 for healthcare costs before they die. And that figure doesn’t even include long-term care expenses.
• If you’re like my parents, you may want to buy a second home (or a vacation home) after you retire. As you probably know, the mortgage application process includes several rounds of credit checks, and your credit score directly affects how much you are eligible to borrow as well as the interest rate you’ll pay on your mortgage.
• In many states, your credit score may affect your car insurance rates.

A little debt isn’t always a bad thing

While many people aim to pay off as much debt as possible before or shortly after they retire, having zero debt can be problematic, too. If you find yourself in a situation in which you need to borrow money, but your mortgage and other loans have long been paid off, you may have trouble qualifying.

FICO, the data analytics company behind the famous score, provides consumer credit scores to lenders to help them determine how much credit they should extend to an applicant. FICO requires that your credit report shows activity at least once every six months to assign you a FICO score. And your credit line must be at least six months old to qualify for scoring. If you haven’t had any activity on your credit report for years, establishing new credit may be difficult – in some cases, almost like starting from scratch.