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Credit scores still matter even if borrowing is over

May 17th, 2020 12:41 PM by Sam Kader

At some point you will buy your last car and refinance your last mortgage. Surely, you can stop worrying about your credit scores right? Well, not really. Let's start with some reasons why maintaining good credit scores is a lifelong process

  1. Lenders aren't the only ones checking your credit. Most insurers are credit based insurance scores to help set premiums for auto, homeowners and renters policies. Even your cell phone providers often reserve their best deals for those with the best credit. Many potential employers check your credit reports should you want to work or return to work in retirement. Utilities and landlord also typically check credit scores if you move. Senior housing assisted  living and continuing care retirement communities may also use credit histories and scores to evaluate applicants. 
  2. Your borrowing days may not be over. You may need money to pay medical bills, replace a car, help a family member, make a house repairs or remodel your home to allow you to age in place. You may want to access some of your equity with a reverse mortgage. Reverse mortgages allow homeowner age 62 and better to tap their home equity without having to repay the loan until they sell, move out or die. Reverse mortgage lenders typically don't have minimum credit-score requirements but a credit check is part of the financial assessment needed to get the loan. 
  3. Maintaining good credit scores isn't that hard. A single credit card is enough to maintain good credit cores as long as it reports to all three credit bureaus. The card should be used lightly but regularly and balances paid in full. 
There are instances when credit scores shouldn't be your top priorities. 

  • You are struggling to pay your bills. It make little sense to keep sending money to credit-card company if you having trouble paying for necessities: shelter, food, utilities and medications. Consider talking to a credit counselor near you and to an experienced bankruptcy attorney about your options. 
  • You need to file for bankruptcy. If bankruptcy is your best option, then you should consult with an experienced bankruptcy attorney. Bankruptcy is not a credit-score killer it's often reputed to be. Credit scores typically plunge in the months, before a bankruptcy filing but then start to rise soon after with responsible credit use. It's possible to get back to bear-prime credit scores within a few years after bankruptcy. 
  • You are trying to escape a onerous time share. There's often no easy way out of a time share that requires paying annual fees and other costs. Sometimes owners can give the time share back to the resort developer or sell or give it away. Other times, the only way to get rid of it is to stop paying and experience the consequences which can include foreclosure and credit-score damage. Older people with less reason to borrow may well decide to hit to their scores which can linger for up to 7 years and up to 10 years for bankruptcy It 's better than continuing to struggle the rest of your lives. 


Posted in:Credit Score, FICO and tagged: Credit ScoreFICO
Posted by Sam Kader on May 17th, 2020 12:41 PM

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Pacific Coast Financial, LLC

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Seattle, WA 98133