Even in retirement, it’s wise to monitor your credit score | Business

Question: Now that I’m retired, my income and expenses are the same every month. So, do I still need to monitor my credit score?

Answer: he federal Consumer Financial Protection Bureau recommends regularly monitoring credit scores at any age, but particularly for seniors who often are at greater risk of identity theft or fraud. Unexplained credit score changes are warning signs of these crimes.

Regrettably, data breaches have made identity theft and fraud more common place by exposing personal information of millions of consumers. In some cases, criminals steal Social Security numbers and birth dates. Unlike credit card numbers, this type of personal information cannot be changed easily making the need for fraud and identity theft protection that much more important.

There are several ways to safeguard sensitive information from misappropriation, including checking bank and credit card statements, fraud alerts with account security freeze options, identity theft protection services and, of course, credit score monitoring.

Consumers can request a free credit report every 12 months to check for mistakes or fraudulent entries from annualcreditreport.com.

There are three nationwide credit reporting agencies — Experian, TransUnion and Equifax. When examining your report, question any unrecognized entries as well as verify personal and financial details are accurate and complete.

Credit scores likely will change with major credit purchases, new loan applications or any other access of available or new credit. For example, many retirees downsize or right-size their homes, often resulting in a new mortgage. To qualify for the best rates, be sure your credit scores are optimum for you by correcting any errors on your credit reports, according to MoneyWise.com.

Experian Credit Bureau suggests one way to easily improve a credit score is to reduce the amount of debt. Avoid making routine payments with credit cards which are revolving credit themselves. By keeping balances on these accounts low you can help avoid debt.

Also, Experian cautions that shifting balances between credit card accounts doesn’t eliminate the debt problem. Also, consumers routinely should scan credit reports to see if any accounts have past due payments and subsequent fees to eliminate any errors.

To bolster credit scores, determine exactly how much is owed and the interest rate on each credit card or existing loan, then pay off the highest rate accounts first, according to myFICO.com.

In retirement, income and bills are often similar month-to-month; therefore, myFICO.com recommends automated payment plans directly from bank or credit union accounts. Scheduling payments to individual creditors can help you stay on top of bills and reduce the chances of past due payments, which could lead to a lower credit score.

Additionally, AARP suggests you shouldn’t rush to close old accounts. The age of your oldest and newest credit accounts along with the average age of all accounts make up 15% of your credit rating. If you’re not paying annual fees on old accounts, it can be worthwhile to let them remain open. The longer you’ve had credit, usually the better your score.

Again, routinely monitoring your credit score is important, and particularly in retirement, to protect against fraud and help with any future needs to access credit.

Michael Bateman is a retiree who previously worked in marketing and corporate communications.

Michael Bateman is a retiree who previously worked in marketing and corporate communications.


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