Credit rating upon retirement
Hi Terry, my and my wife’s credit ratings are both over 820. She is retired and I am retiring at the end of 2020. As such we anticipate our income dropping about 25%. We own our house, we are current on all debt and only owe on a car (3 more years) and a home improvement loan. Will our credit ratings dip because of our lower income? Thanks!
Terry Says
Income is the one major factor that is NOT considered in your credit rating! They only review your payment history, total credit outstanding, total available credit, and length of time at the same address. Those are the major factors in your credit report. So if you keep paying on time your credit score should not change.
Obviously, having a good credit score is a point of pride for many people (myself, included). But once you are retired you are not likely to “need” a high score — unless you are planning to refinance your mortgage (which you should do BEFORE retiring when you have a stream of income that is not retirement income) or buy new auto or life insurance. Otherwise at this stage of your life a few points either way is not material.
