They Had Great Credit Scores. Then They Retired

livemint.com:

Golf scores tend to improve in retirement. Credit scores, not so much. Even people with pristine records of on-time payments can expect their scores to slip after they stop working.

While stopping work doesn’t ding your credit directly, living on a fixed income and paying off old loans can lower a score, said Ethan Dornhelm, vice president of scores and analytics at FICO. Credit scores matter to millions of retirees even if they are less likely to apply for mortgages, loans or other debt, financial advisers said. Scores are used in a range of insurance and healthcare decisions, from setting your premiums to whether you are accepted to an assisted-living facility.

Ideally, financial freedom in retirement should mean no longer caring about whether you are a 790 or a 650, but scores remain important as more retired Americans carry mortgage debt and credit-card balances, said Bill Stack, a financial adviser who specializes in serving seniors in Missouri’s Ozark Mountains. Points of pride Clarence Stokes, a 67-year-old former public-utility employee in Louisville, Ky., said his score peaked at 806 shortly after he retired in 2017, but dropped below 740 in 2019 after his wife forgot to pay a $15 balance on her JCPenney credit card while the two were traveling across Europe. He tried in vain to get the late payment removed from his credit report.

“I was upset so I canceled the card, and it dropped our score," he said. Since then, he hasn’t been able to get his score back above 800. It is frustrating, said Stokes, who prides himself on a long history of on-time payments and who along with his wife paid off his 30-year mortgage 13 years early in 1999.