— -- You've checked your savings, and your best strategy for claiming Social Security benefits, but is your credit where you want it for retirement? You might think in retirement — when many are without an employment income — that credit isn't necessary anymore. Assuming everything goes exactly according to plan, you might be right.
Even if it does, though, you may be passing up perks you might enjoy, and that could be yours, if you have good credit. If you're looking to travel, for example, you might want a rewards card that comes with a generous sign-up bonus, which could net you airfare that is essentially free. Or maybe you could use a hotel rewards card that will offer you free nights (or a free additional night). Incentives like those can help a fixed income stretch to include more fun. Not a traveler? Cash-back cards can help your money go further. And no matter what your age, using credit cards gives you purchase protections that are not available when you use cash or debit cards.
The price of admission for this world of discounts and incentives, though, is excellent credit.
And there, your credit health has something in common with your physical health: It doesn't keep. You have to keep exercising and eating vegetables — or using credit from time to time — if you want to maintain it.
And lest you think you mainly need a good credit score if you're planning to take on debt, think again. We recommend paying the balance, in full, every month -- this will keep your debt ratio low, which can benefit your score. If you fear you'll forget what the balance is, you could go online and repay each charge the same day you make it. That way, your credit stays healthy and benefits will still accrue.
If responsibly eliminating your biggest debts has left your credit a shadow of its former self, you may even need to look for ways to rebuild. No, you're (probably) not looking to buy your first home. But you do want to be able to take advantage of freebies — no fees for checked luggage, and rental car insurance, for example — and sign-up bonuses. And the cards with the best rewards typically require high credit scores.
If the last time you checked your score was when you applied for a mortgage or car loan, you are far from alone. But checking your credit regularly is a good habit to get into. Experts also recommend checking your banking and credit accounts regularly. In addition to letting you know how creditors see you, checking scores and accounts can tip you off to possible identity theft or fraud — and the sooner those are detected, the better.
You can get two free credit scores, updated every 30 days, from Credit.com. It is truly free, and it includes a personalized action plan for improving your credit. That way, when you're ready to leave the workforce, or to begin easing your way out, you'll have the added assurance that comes with having good credit.
Any opinions expressed in this column are solely those of the author.