In previous posts our Florida readers have learned about credit card debt, the affect it can have on a credit score, the unsavory practices of credit card collection practices and how credit card debt can contribute to bankruptcy.

Recently it was demonstrated that just as too much credit card debt can be a problem, so can zero credit card debt. Those without any credit card debt include those who are fresh out of bankruptcy, those who simply avoid credit cards and many senior citizens. Those senior citizens without credit card debt are finding that their credit score is impacted. In fact, they could find themselves unable to score at all.

There are several very good reasons why a senior citizen will need to establish or maintain a good credit score.

  • Downsizing: If a senior wants to sell a home and rent an apartment, the landlords will check the potential renters’ credit score before offering a lease to sign.
  • Co-signing: For grandparents who want to co-sign on a loan for a child or grandchild, a good credit score will be a requirement.
  • Utilities: If a senior moves, the utility companies in the new community will need a credit score to set up a new account.
  • Credit limit: Without a credit score, a senior may not get the credit limit he or she wants for a major purchase.

There are a few good ways to build up a good credit score. This applies to both seniors and to those fresh out of a bankruptcy.

  • Secured card: Obtain a secured card that reports to all three major credit scoring agencies. Use it and pay it off on time.
  • Small card: Obtain a credit card for small purchases, such as a gas card. Use it and pay it off on time.
  • Bill payment: Use a credit card to auto-pay your utility bills. This is not only good to build a credit score, but is a reminder to use your card once in a while.

As changes are made in the financial and lending industry, a good credit score can make a big difference for consumers of any age.

Source: CreditCards.com, “Debt-free seniors may find themselves ‘unscorable’,” Marcia Frelick, July 31, 2012