There are many factors that affect your credit score. Retirement isn't one of them. A credit score is a shorthand summary of your credit history. Your credit history includes all of your borrowing and repayment activity from the past seven years. It does not include your income. Simply retiring will not affect the score. However, a drop in income can make it more difficult to get credit, even with a good credit score.
Credit Scores
When you think about your credit score, you should be thinking about three numbers, not one. Each of the three main credit bureaus -- Experian, Equifax and TransUnion -- issues its own set of scores. Your score will differ from one bureau to the next. The bureaus use slightly different formulas to convert your credit history into a number. Moreover, not all lenders report to all three bureaus. The difference in the formulas and the difference in data result in different scores. However, if you have a low score with one bureau, it's unlikely that you will have a much higher one with another. Bad credit history is bad credit history, regardless of who is rating it.
What Is In a Credit Report
A credit report is a record of your borrowing and repayment history. It contains information about your debts, including mortgages, loans, credit cards, store cards and cell phone contracts. This includes balances, credit limits and missed and late payments. If a lender passes your debt onto a collection agency, it'll be on your credit report. If you've had any liens or court judgments against you, it'll be on the report. If you've filed for bankruptcy or defaulted on a debt, it's in the report. You can get a free copy of your credit report from www.annualcreditreport.com.
What Is Not In a Credit Report
A credit report doesn't have any information about your income. If you retire, it will not affect your credit score. The report doesn't include any of your savings or checking accounts. With a few exceptions, it doesn't contain information that is more than seven years old. Chapter 7 bankruptcy will stay on your credit report for 10 years.
Getting Credit
Whether or not you get credit depends on a variety of factors. Your credit score is just one of them. Your income is another. When you retire, your credit score shouldn't suffer. However, if your income drops, it will be more difficult to borrow money. If you're looking to take out a large loan, like a mortgage, your age may also be a factor.
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