Why You Don't Want To Be "Credit-Retired"

MoneyTips

You've reached a point where you don't have to use credit cards anymore. Your home is paid off. You don't have other outstanding debts. You must be an excellent credit risk, right?

As strange as it sounds, creditors do consider you a risk when you've become "credit-retired." If you haven't been using credit for some time, you don't have any recent information in your credit report – which is the primary method lenders use to assess your risk. If lenders can't assess your risk, they won't extend credit.

Why do you care about credit ratings if you have resources to pay for everything? For one reason, you can't count on those resources lasting – consider a stock market crash, an expensive medical condition, or other event that could rapidly drain your resources. You could eventually be in a situation where you need credit again for a large purchase – such as replacing your car or downsizing to a new home – and cash simply isn't feasible at the time....

from MoneyTips http://bit.ly/2LcDNzG