We’ve all seen the commercials for checking your credit score, and some even talk about ways to boost it, but if you’re over 50 and well established, does the number really matter that much?
According to the FICO® Score model, the average credit score in America is 714. And with the length of your credit history accounting for a significant portion of your score, it makes sense that those older than age 56 have the highest scores.1
Your credit score determines if you’re able to obtain a mortgage and the corresponding interest rate on the loan. The better the number, the better your rate, which could save you a pretty penny over the length of the loan. The same applies to other large purchases such as cars and boats.
According to an AARP article, most financial pros say good credit matters at any age. The reasoning is that while you may not be in the market for a home or a boat, unexpected things happen at any age, and having the wherewithal to borrow money when you need it can make a big difference.
So, if you’re someone with stellar credit and few to no missed payments, you may feel it’s crucial to keep a high credit score. But what about when the unexpected turns your clean slate a little muddy? According to industry experts, medical bills aren’t reported, so they won’t necessarily drop your score down. Defaults can be damaging, but how badly will depend on where your score lies and how you’re handling other payments.
Suggestions for keeping up a good credit score:
- Get credit as early as possible: The age of your oldest line of credit impacts your score
- Monitor your credit score: Understanding your credit usage can help you pay the right debts first
- Create and stick to a budget: A line of credit is only good for your score if you can pay it off rather than end up with a string of debt
- Make payments on time: Payment history makes up 35% of your score3, so pay at least the minimum
While we may not be able to change your credit score, having a financial strategy in place may be able to help you focus on saving and spending. Contact our office today and let’s talk.
This document is for educational purposes only and should not be construed as legal or tax advice. One should consult a legal or tax professional regarding their own personal situation. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products offered by an insurance company. They do not refer in any way to securities or investment advisory products Insurance policy applications are vetted through an underwriting process set forth by the issuing insurance company. Some applications may not be accepted based upon adverse underwriting results. Death benefit payouts are based upon the claims paying ability of the issuing insurance company. The firm providing this document is not affiliated with the Social Security Administration or any other government entity.
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1 https://wallethub.com/edu/cs/average-credit-scores/25578
2 https://www.aarp.org/money/credit-loans-debt/info-09-2012/does-credit-history-matter-after-50.html
3 https://www.wellsfargo.com/financial-education/credit-management/calculate-credit-score/