A credit score, as we all know, is a three-digit rating of how financially responsible an individual is (based on his or her credit history). This credit history takes a lot of factors into account and assigns a certain amount of weightage to each factor. While the weightage is different based on the institution providing the rating, the factors are usually similar. These include your payment history, debt history and length of time your credit rating has been in existence for, among others.
While the importance of a strong credit history is well-known, there is myth among certain quarters of the public that this figure’s relevance is diluted once you cross the age of 50. This is completely untrue! Here’s why.
Why those beyond 50 still need a good credit score
In case of medical emergencies
It’s no secret that age and medical problems are directly proportional. The older you grow, the more susceptible your body is to medical issues. According to the National Institute of Health, these problems typically include memory loss or Alzheimer’s disease, osteoporosis, weakened eyesight and hearing loss, heart problems, gastrointestinal problems, and incontinence, among others. This higher susceptibility to illness, disease, and injury means a greater possibility of medical expenses, and a higher credit score means medical loans or medical insurance will cost lesser interest and premiums respectively.
Expanding business horizons
If you run your own business and wish to expand, then a credit rating is vital. For example, if you want your business to start accepting credit cards, or begin credit card processing through the internet, a bad credit rating will mean higher fees charged by credit card processing firms in exchange for these services. Experts explain why ISOs (independent sales organizations) are able to offer their credit card processing services to owners with a low credit rating in exchange for a higher fee. The prime reason here is that they do not have to adhere to the strict laws and regulations like banks do.
This is also true if you’re looking for a cash injection into your business, whether that be through a mortgage or a business loan, a good credit rating will keep interest levels low and essentially help you buy that loan amount at a cheaper rate.
Giving your loved ones a helping hand
Your family can need a financial hand from time-to-time, and a good credit score is important in this regard. Imagine your son or daughter needs a loan to buy a house or a car or get married. Or your grandchildren require student loans to help put them through college. Wouldn’t you want to help out? Whether this involves taking on a new job or cosigning a loan, credit histories will come under scrutiny, and having a strong credit line means the process will be smoothened to a great degree.
Provide a leg up during retirement
Once you’re well into the 50s, the time comes when you seriously consider retiring from work. This means a whole lot of financial planning including the renewal of insurance policies for you and your spouse, the repayment or refinancing of debts, creating an estate plan and more. A good credit history means you can have the upper hand in the whole process of reshaping your finances and getting the best possible rates for every step you take. If you do end up going into retirement with mortgage payments still to be cleared or a loan with outstanding payments, having a good credit history means the banks won’t penalize you as quickly, and will provide you with some wiggle room in case you’re late on the odd payment.
So remember, a solid credit rating is vital, no matter what age you are. As long as you have even the slightest financial dealings, it is important to keep your credit rating at its highest to ensure that you have financial peace of mind.
A pro gamer, a great baker, and a tech-savvy entrepreneur with an insatiable appetite for the good life, so to speak — that’s Jordan Greer for you! But more importantly, he indulges in writing blog posts to express his thoughts on business and technology and other related aspects — investment, personal finance, credit cards and payment processing. Apart from managing his small business with aplomb, Jordan keeps himself busy by keeping a close eye on the new technology in the market and tracking business trends.
With a fresh outlook and a young soul (like many entrepreneurs looking to make it big in the business world), Jordan shares his professional experiences and the knowledge he’s gained from them through his posts. Young, single, and ambitious, you’ll find Jordan cooking up a storm in the kitchen or talking about his love for cars in his spare time.