A recent survey conducted of 1,037 non-retired consumers ages 51 to 70, i.e. the "baby boomer" generation, found that almost half of them believe that their credit score does not matter as much after age 70, according to TransUnion.
“Despite the misperception that credit loses importance later in life, the fact remains that your credit score is a vital financial tool at every age,” said Ken Chaplin, SVP for TransUnion.
About 70 percent of respondents indicated that they believe a healthy credit score is necessary for refinancing a mortgage, but only 61 percent said they believe a healthy credit score is necessary to co-sign a loan for a child or grandchild. Only 32 percent of boomers surveyed said they thought they needed a strong credit score to enter a long-term care facility.
“Baby boomers need to prepare their credit score for retirement so they have the tools to fund financial obligations later in life,” Chaplin said. “As Americans age, good credit can not only help them finance medical expenses and long-term care, but also help them support children, grandchildren and other family members as they take on middle-life expenses, like buying a house or paying for school.”
“Despite the misperception that credit loses importance later in life, the fact remains that your credit score is a vital financial tool at every age.”
Retirees can stay credit-active by using credit cards regularly and paying them in full at the end of the month.
“Most retirees are past the point of making major purchases such as a new house or car,” said Chaplin. “But that doesn’t mean you should stop using your credit cards.”
Baby boomers may not be the only demographic that doesn’t think having a good credit score is important. A report last May from the Consumer Financial Protection Bureau indicated that 26 million American adults (about 10 percent) do not have a credit history with any of the three nationwide consumer reporting agencies, termed as “credit invisible” by CFPB director Richard Cordray.
“A limited credit history can create real barriers for consumers looking to access the credit that is often so essential to meaningful opportunity—to get an education, start a business, or buy a house,” Cordray said. “Further, some of the most economically vulnerable consumers are more likely to be credit invisible.”