How your credit score can affect your retirement

Nearing retirement age and not too bothered about your credit score? Here's why you should be.

Last updated:

An increasing number of Australians are planning to work past the age of 65, highlighting the need for financial security during your retirement years. Figures released in April 2016 by the Australian Bureau of Statistics showed 71% of Australians over the age of 45 intended to work past the age of 65, which was up from 66% in the previous years' survey.

Many Australians take out personal loans and credit cards during their retirement years, and if you're planning on doing so as well you'll need to maintain your credit score.

What is my credit score?

Your credit score is a number calculated by credit reporting bureaus that hold your credit report. Here is how the two credit reporting bodies Experian and Equifax calculate credit scores:

Credit bandExperianEquifax
Very good700-799726-832
Fair / Average550-624510-621
Weak / Below average0-5490-509

Free credit score & report

Lenders know your credit score, so why shouldn't you?

Get your credit score and comprehensive report now!

How is my credit score calculated?

It is calculated using the details listed on your credit file. This includes:

  • Personal information. Your age, the length of time you've been employed and time you've been at your current address can affect your credit score.
  • Consumer credit information. Any lender you apply for or are approved for credit with can affect your credit score. This includes the type of lender it is, how much you're approved for and how many applications you make.
  • Details of directorships and proprietorships. If you are a director or proprietor your credit score can be influenced by the commercial section of your credit file.
  • Negative credit listings. Any details of overdue debts, defaults, missed or late payments or serious credit infringements will have a negative impact on your credit score.
  • The age of your credit report. The listings on your credit file will have a different effect depending on the age of your credit file. For instance, if you make a number of applications for credit and your credit score has only been active a short time, it may have a larger impact on your credit score than if your credit file had been active for a number of years.

Why is my credit score important during retirement?

Your credit score is important during every life stage, but especially your later years.

  • To support children. In today's property market, helping children get onto the property ladder or supporting them financially in later years has become more common. This has made it harder for those reaching retirement age to plan for their own pension funds. By keeping a clean credit score you can make sure you'll be able to access finance should you need it – whether it be for you or your children – before and after you retire.
  • To invest in property. If you pay off the mortgage for your primary residence before you retire, using the equity to invest in a property during retirement can provide additional income. However, you'll need a good credit score to even consider this strategy. If you're nearing retirement age and want to clean up your credit file, there are ways you can improve your credit record.
  • To be eligible for credit cards and personal loans. If you're a self-funded retiree or relying on pension benefits, you may still like the convenience of a credit card to help pay for unexpected purchases. Similarly, a lump-sum personal loan or line of credit loan may also suit your retirement lifestyle. There are banks and lenders that may consider you, but it's important to compare your options before you apply.

Just like working hard to save before you retire, a good credit score can help support you during your retirement years. The first step comes from finding out where you stand with your credit today.

Was this content helpful to you? No  Yes

Related Posts

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.

2 Responses

  1. Default Gravatar
    MichaelNovember 3, 2016

    Why is my credit score so low (769 – Very Good).
    I own two homes and a block of land – outright
    I pay off my credit card – in full and on time (always)
    I’ve never had to pay interest on my credit card over some 30 years.
    I don’t have any outstanding significant debts (car insurance and registration due shortly but this only about $1500 – $1700
    When I did have a home loan I paid it off in 5 – 6 years (instead of 25 -30 years)
    I’m a self funded retiree

    • Avatarfinder Customer Care
      DeeNovember 10, 2016Staff

      Hi Mladler,

      Thanks for reaching out.

      Just for your information, your credit score is in the second highest bracket. You can actually get a more detailed credit report through this page so you have a better grasp how you got such score.


Ask a question
Go to site