Back
Retirement and Credit: Why You Shouldn't Let Your Score Slip
Many senior citizens in India believe that once they retire and pay off their home loans, their credit score no longer matters. However, a healthy CIBIL score is crucial even in retirement for accessing emergency medical loans, top-up health insurance policies, or even becoming a co-applicant for a child's business loan. Maintaining a score of 750+ ensures financial independence in your golden years.
The Trap of Closing Old Credit Cards
Retirees often close old credit cards to 'simplify' their lives. This is a mistake. Closing your oldest accounts reduces the 'Age of Credit', which can cause your score to drop. Keep your oldest cards active, even if you only use them for small utility bills once a month. This preserves your long and healthy credit history.
Managing Credit with Pension Income
While you no longer have a corporate salary, your pension and interest income are considered valid by lenders. Continue to use a credit card for daily expenses but ensure you never miss a payment. If you are debt-free, having at least one active credit line (like a small-limit credit card) ensures that your CIBIL report remains 'active' and scored.
