Martin Pelmore, Prepare for Retirement by Safeguarding Your Credit Score<br><br><br><br>San Mateo, CA (PRWeb) January 31, 2007 -- This year, the oldest Baby
Boomers turn 61, meaning that the United States has officially begun
the race to Baby-Boomer retirement. With many thousands of Americans
retiring each year, and the number expected to grow, <a href="http://Bills.com">Bills.com</a>
co-founder and co-CEO Brad Stroh suggests that those entering their
"golden years" check their credit scores before giving up their
paychecks or moving into their retirement homes. <br>
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"People considering retirement should remember that their credit scores
-- and the creditors that scrutinize it -- will not disappear with the
first withdrawals from retirement funds," Stroh said. <br>
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Credit scores incorporate credit history, amount of credit available
and used, number of late and on-time payments and whether any payments
due are in default. Creditors also analyze other factors, including
debt and payment history relative to income -- one factor sure to
change at retirement. Some creditors also consider job history, which
ends when an employee leaves full-time employment. <br>
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Credit scores fall in a range between 300 and 850, with higher numbers
indicating a greater likelihood of repaying debt. A score below 680
usually results in a borrower being charged a higher interest rate or
denied credit. To maintain a credit score that will make for an
enjoyable post-retirement life, Stroh suggests the following:<br>
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1. Before retirement, focus on investing. Eliminate credit card debt by
funneling money previously used to shop, dine out or travel to paying
debt, and then into retirement savings. People age 50 and over can
contribute $20,500 to a 401(k) plan in 2007, and $5,000 to an
individual retirement account or Roth IRA. For people younger than 50,
those limits are $15,500 for a 401(k) and $4,000 for an IRA. <br>
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2. Live on planned retirement income now. Give retirement a "dry run"
by living on your anticipated post-retirement income. Consult a
financial planner to determine how much income you will require.
Meanwhile, use the savings to pay off remaining debt (including credit
cards, vehicles and home mortgages).<br>
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3. Line up insurance. Review insurance needs, including homeowner's,
auto, long-term care, umbrella policies and life insurance (which might
not even be needed in retirement). If changes are needed, make them
while employed. Insurers give their best rates to people with good
credit scores, so plan to stay with a policy for a while during the
transition to retirement.<br>
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4. Settle into home and financing. If you plan to move to a smaller
home or a condominium, consider moving before retiring. You are likely
to receive better mortgage terms with your current income than you will
later. The tax deductions associated with a move also might benefit you
more while employed. Similarly, for the best terms, open any planned
home equity line of credit on a home before retirement.<br>
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5. Keep the cards. If you plan to streamline finances, think twice
about closing old accounts. Credit scores are partly determined by
comparing debt to credit available. Closing unused accounts while
maintaining some debt results in a likely higher debt-to-credit ratio,
which looks like a greater credit risk -- and lowers credit scores.<br>
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6. Check credit reports now -- and frequently later. Don't retire your
vigilance when you retire. Check credit reports at least once a year --
more often if you plan extensive travel, which exposes seniors to
greater risk for fraud and identity theft. Free credit reports are
available once a year at . All three credit reporting agencies (Equifax, Experian and TransUnion) offer credit reports online, as needed.<br>
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"Retirement is about relaxation," Stroh said. "Make sure you can make
the most of it by securing every aspect of your finances first,
starting with your credit score."<br>
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Based in San Mateo, Calif., <a href="http://Bills.com">Bills.com</a> is a free one-stop online portal
where consumers can educate themselves about complex personal finance
issues and save money by choosing the best-value products and services.
Since 2002, <a href="http://Bills.com">Bills.com</a> and its partner company, Freedom Financial
Network, have served more than 10,000 customers nationwide while
managing more than $350 million in consumer debt. The company's
co-founders and CEOs, Andrew Housser and Brad Stroh, were named
Northern California finalists in Ernst & Young's 2006 Entrepreneur
of the Year Awards.<br>
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