About one-third of American baby boomers risk damaging their credit scores in retirement by reducing or eliminating their use of credit cards, according to a survey by TransUnion, one of the three credit bureaus that gather information used to calculate the scores. Using credit cards for small purchases keeps your credit active. That can help ensure you’ll have available credit–or good credit scores–when it counts. Using credit cards for small purchases keeps your credit active.
For example, an older adult wished to buy a new car. She was turned down for a loan with a low interest rate simply because no credit card purchases had been made for many years; she preferred to pay with cash or her debit card. That had hurt her credit scores, preventing her from getting a deal that worked for her.
TransUnion consumer data show that 20 percent of people ages 51 and 70 have subprime credit, or a score of less than 600. Your retirement plan might appear bulletproof, but circumstances easily change–and if they do, it’s nice to know you can lean on your credit.