Financially secured retirement life is beautiful to imagine. To make your imagination into reality you just need to prepare and implement a successful retirement plan. Besides various other factors, your CIBIL score acts as a major determinant in achieving your financial goals for retirement. The best way to ensure a good CIBIL score during your retirement is effective retirement planning, along with balancing your debts and liabilities. Any retirement plan, if well executed, can help you create a constant flow of income post retirement.
Sometimes, you may be in dire need of funds due to any unforeseen circumstances during your retirement. For this, you need to have a good CIBIL score for the lender to check and offer you a loan at concessional interest rates. Therefore, to build or improve your CIBIL score, you can check your credit score for free once a year and receive monthly updates from other FinTechs that offer free credit score.
Why is your CIBIL score important in times of retirement?
There are chances but less likely that you shall require a loan or any credit product in your retirement. Any unforeseen circumstances can occur irrespective of age and there could be a liquidation problem or cash crunch situations. Therefore, maintaining a good CIBIL score is always beneficial to overcome tough situations. Further discussed are some of the reasons for maintaining a good CIBIL score after retirement.
Lower Insurance Premiums with good CIBIL score
A good CIBIL score is a vital parameter that assures your banks and NBFCs of your creditworthiness. Both, life and health insurance are equally important in one’s life during retirement or even before. Life insurance makes sure that an individual’s family is secured after his/her demise. Health insurance becomes highly critical with increasing age. Your good CIBIL score can help in availing lower insurance premiums during times of retirement, as insurers do check your credit score while determining insurance premiums.
Helps in relocation and refinancing existing property
In a given scenario in which your children plan to settle abroad or go out for education and you are finding it difficult to maintain a large home. To help you out from this situation, your healthy CIBIL score can assist you in refinancing your current property in order to purchase a new one with a lesser amount. Relocation or refinancing becomes easy and hassle-free with the help of your good CIBIL score. You become eligible to avail concessional interest rates on various loan products from leading financial institutions that further enhances your negotiation power.
Supports in availing Business or Startup loans
Sitting ideal is not the way many retirees want to spend their retirement life. Many people have a dream of pursuing their passion, which they were unable to while they were in service because of household requirements, family responsibilities and other obligations. Any type of business whether big or small requires capital to start and become profitable. Therefore, availing funds to start your own enterprise becomes easy, if you have maintained a good CIBIL score. Maintaining a good CIBIL score is not at all tough, as you just need to make timely payments of your loan EMIs, if any and your credit card dues.
Factors that negatively impact your CIBIL score
Below stated are some of the key factors that shall be avoided in order to maintain high CIBIL score:
- Not checking your CIBIL report for errors and resolving them at the earliest
- Missed or delayed payments of loan EMIs or credit card dues
- Remaining unpaid debts, both secured and unsecured
- Paying only the minimum payment dues on credit cards and not paying in full
- Applying for multiple credit applications, such as loans and credit cards
- Length of the Credit History – Longer history resulting in good credit score
- Maxing out on assigned total monthly credit limit frequently and not repaying in full
Takeaways for Retirees:
To remain dependent on others for funds during retirement is usually not much appreciated by most of the service people post retirement. Your good CIBIL score helps you avail funds at competitive or even at concessional interest rates and make you live a respectable and dignified life. To be more aware and updated you need to diligently check your CIBIL report regularly and resolve any type of minor or major errors that you may witness. Any failure or delay in reporting your CIBIL report errors can lead to a drastic fall in your credit score. So, remain alert to pursue your passion and enjoy retirement to the fullest.
