A good credit score is essential in life, and that remains true when you retire. In fact, maintaining a high credit score in retirement could save you thousands of dollars throughout retirement. Fortunately, learning how to raise your credit score is something most people can accomplish at any stage in life.

Why Good Credit Is Important

A credit score reflects your history of borrowing money, and that past behavior reaches into several areas of your life. For example, a credit score can affect your ability to get loans, insurance, housing and more.

Your credit may also be important if you plan to buy property or a vehicle with help from a lender. For example, if you decide to downsize in retirement, you might choose to finance a portion of your next home. With bad credit, you're less likely to qualify for the best rates and loan options. On large loans such as a home loan, interest costs can be substantial — having good credit helps keep these costs down.

You may be surprised at how often businesses check your credit. Even when you're not borrowing money, a high credit score can make life easier. You can often buy insurance in retirement with bad credit, for example, but you may pay higher premiums from the start if you have late payments and other negative entries in your credit history.

Your credit is just one piece of the puzzle: Life insurers also examine your health history and other factors to evaluate your application, while auto insurance will check your driving record (among other things). Still, your credit may help you secure lower premiums.

How to Maximize Your Credit Score in Retirement

The good news is that your income is not part of your credit score, so you can have excellent credit even after you stop working. Here's how to raise your credit score and keep it as high as possible.

Check for Errors

Check your credit periodically for errors and signs of identity theft. Look for loans that you don't recognize and any inaccurate public records. It's critical to remove any negative items you're not responsible for, such as erroneous bankruptcy reports or defaulted loans. Those entries drag your scores down unnecessarily, and removing them can provide a quick boost.

Pay Bills on Time

Your payment history is one of the most influential elements in determining your credit score, which means it's vital to get payments in before the due date. If you're behind on payments, try to get current or consider working out an arrangement with your lender so you can minimize damage to your credit scores.

Pay Down Debts

You may be able to raise your credit scores by paying down debt. Credit scoring models look at how much you borrow against your available credit. If you're maxed out, your scores may suffer, but paying down balances can help. Especially with credit cards, it's smart to keep your balance below 30% of your credit limit.

Monitor Your Credit

Excellent credit requires ongoing attention. Under federal law, you're allowed to check your credit at least once every year at no charge, and doing so does not hurt your credit scores. This exercise helps you understand what's behind your credit scores, and it may help you stop fraud before it gets out of hand. You can often check your credit for free online with the three major credit bureaus.

The Bottom Line

It's important to manage your credit throughout life, and that doesn't change when you retire. High credit scores may help you save money on housing and insurance premiums, and good credit is helpful in a variety of other ways. So, what is a good credit score? The credit reporting agency Experian generally considers a score good when it reaches 700 or higher.

To lift your credit score, stay current on any loans and minimize borrowing — especially with revolving debt like credit cards. Along with monitoring your credit for signs of trouble, these healthy financial practices can help you promote higher scores over time.