CHICAGO (3/8/16)--Baby boomers may dial back on working as they age, but maintaining steady, responsible credit use can better secure their financial future, according to a recent survey by TransUnion.
Baby boomers, or U.S. consumers ages 51 to 70, have a mixed understanding of the importance of a credit score--nearly half said they believed of their credit score matters less after they turn 70.
“Baby boomers need to prepare their credit score for retirement so they have the tools to fund financial obligations later in life,” said Ken Chaplin, senior vice president for TransUnion. “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.”
While 70% agree that a solid credit score is required to refinance a mortgage, only 61% were aware of the importance of a healthy credit score when co-signing loans for a child or grandchild. Roughly a third said they believed a strong credit score might be necessary to enter a nursing home or long-term care facility.
“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," Chaplin said.
Chaplin advised retirees keep “credit active” by making small purchases on their credit cards and paying the balance in full monthly. This also will prevent card accounts from being closed due to inactivity.
“Most retirees are past the point of making major purchases such as a new house or car,” he said. “But that doesn’t mean you should stop using your credit cards.”