Why do you need to care about your credit score? You’re in your retirement years, enjoying a golden time in life. Surely, you needed to worry about credit while you were working. You needed car loans and mortgage loans. But in this new phase of your life, is it really still that important?

YES.

Retiring with debt.

A growing number of Americans are retiring with debt. The average retiree has about $2,800 in credit card debt alone. Not to mention, most still have mortgages they owe on, car payments, and possible other loans.

So then why care about credit scores? Well, you may want to refinance your loans. A drop in rates could be your opportunity to save yourself a lot of money. But without a good credit score, this won’t be possible for you. Banks look at your score to determine if you are likely to pay back the loan.

Reaching for retirement goals.

For others, retirement is the time in life to finally do something they’ve always wanted to. Maybe you want to open a small business, bring a new idea to life, buy a fancy car, or travel a bit.

Well, to open a business, you may need to extend yourself some credit. Having a good credit score will help you secure a loan to help you fulfill that dream. Or if you want to travel, opening up a new credit card that gives you good rewards, such as extra airline miles.

How to keep your credit score up.

First off, paying off your debts on time will help keep your score up. You do best not charging more than you can pay in full at the end of the month. Showing you can manage your liabilities in a timely manner is important.

Next, many in retirement find they do not need as much credit as they did when they were working. If you are considering closing an account, be careful of which one you choose, as this could affect your credit score. Your score is based in part by how old the accounts you have are. Older accounts help to build more credit. So when considering closing an account, close the youngest ones first.