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5 Reasons Seniors Don’t Need to Worry About Their Credit Scores

Credit scores become less important as we age thanks to federal protections on retirement income and other important factors.

Jeff Hoyt Jeff Hoyt Editor in Chief is supported by commissions from providers listed on our site. Read our Editorial Guidelines

Many older adults live on relatively low fixed incomes, which means they may have debt that they cannot afford to pay. Seniors may be determined to make sacrifices just to pay those debts, which can include extreme sacrifices such as foregoing necessities like medicine or even medical treatment.

If you are a senior with debt, you don’t need to make major adjustments to your lifestyle just to pay debts and keep your credit score high. In this article, we will look at the top five reasons older adults do not need to worry about their credit scores.

1. Debt Collectors Can’t Come After Your Retirement Income

Social Security

Virtually every kind of state-sponsored retirement income is protected under federal law, including Social Security, veterans’ benefits, disability benefits, and almost all pensions. But what does it really mean to say it’s protected? There are various protections and special rules the government sets around these types of retirement income, but, most importantly, your retirement income is protected against garnishment.

Did You Know?

Did You Know? Most seniors have already paid off homes, cars, and other large assets. If you already own most or all of your major assets, you have very little use for a good credit score.

Let’s say you have a bill you can’t pay. After a period of time, the debt is sent to collections. If you were still working and earning traditional wages, those wages could be garnished by the collections agency — but you are retired and live on Social Security income. That income is protected from debt collectors under federal law, so nobody can touch it in pursuit of unpaid debts.

2. Most Seniors Don’t Need Good Credit

Credit Score

Seniors typically do not need high credit scores because most of the things that require good credit are already in the rearview mirror. It is rare for someone over age 65 to buy a new house or similar asset that requires good credit. Moreover, if you want to take out a loan for a large purchase, it may be a moot point even if you have excellent credit.


FYI: You may want to buy a replacement car during retirement, but it is relatively easy to get a car loan without great credit. The key is to determine if you have room in your fixed budget to comfortably make car payments.

Lenders tend to reject applications from people on low fixed incomes. If you are bringing in only around $1,200 per month from Social Security and pension accounts, you may have a hard time securing a loan because it could be difficult for you to make the payments using your retirement income alone.

It is important to note that predatory lenders will sometimes lend to older adults on low incomes, but those loans usually have extremely high interest rates and create even more debt and stress for you. If you’re on a low or fixed income, you will have a much harder time securing a good loan from a reputable lender, but you will also have far fewer reasons to apply for one.

3. Each Bank Cares Only About the Debts You Owe Them

Bank debt

A credit score is generally a reflection of your overall financial responsibility and creditworthiness, and it may not be that important if you want to deal with just one bank going forward. Let’s say you have three credit cards from three different banking institutions. You cannot feasibly make all three payments each month, but you still want to have access to credit.

Did You Know?

Did You Know? Drops in your credit score will not cause you to lose access to existing credit cards. Your credit score matters only if you plan to apply for a new credit score.

In this scenario, you should choose the card or bank you like the most and make payments on that card. The bank will not care if you default on your payments to other banks. It will negatively affect your credit score and you may eventually lose access to your other credit cards, but you can continue to use your remaining credit card as long as you keep up with the payments.

4. Lawsuits and Tax Liens Are Not Added to Your Credit Report

Credit Report

If you fail to pay off debt on a credit card, personal loan, mortgage, or another form of debt, the entity you have failed to pay could file a lawsuit against you. That probably means you have to show up to court and negotiate some type of repayment plan, but it doesn’t mean your credit will be affected. Why? Because the major credit bureaus have agreed to stop reporting lawsuits and tax liens on tax reports.

That means you don’t need to worry about a lawsuit or tax lien negatively affecting your credit score. Since your retirement income is legally protected, a lawsuit will not result in garnished wages. If you do not address a lawsuit promptly, however, it could result in a loss of property or similar assets that are not protected under federal law. You should still take lawsuits seriously, but remember they cannot take away your retirement income.

5. Seniors Can Still Rent Property With Bad Credit

For Rent Property

Many seniors worry that they will not be able to rent a property with bad credit, and it’s a legitimate concern. Some properties have strict rules regarding the minimum credit score they are willing to accept from an applicant. Most landlords will check your credit score before entering a rental contract with you.

If you inform the landlord that your income is protected and cannot be garnished, however, it will greatly increase the odds of you getting a rental with unpaid debts on your credit report. For help providing the information to landlords, reach out to HELPS nonprofit law firm. HELPS can provide you with a letter confirming that your income is protected, which could greatly increase the odds of renting an apartment or house with a low credit score.

Final Thoughts

Worrying about your credit score as a senior could end up doing more harm than good. You should try to keep up with your bills, but you don’t need to make significant sacrifices to your lifestyle and well-being to keep your credit score high. Don’t stress about your credit report if you can’t make all your credit card or loan payments on time!

For more information on why older adults don’t need to worry about credit scores, check out our interview with Eric Olsen, founder of the HELPS nonprofit law firm.

Written By:
Jeff Hoyt
Editor in Chief
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As Editor-in-Chief of the personal finance site, Jeff produced hundreds of articles on the subject of retirement, including preventing identity theft, minimizing taxes, investing successfully, preparing for retirement medical costs, protecting your credit score, and making your money last… Learn More About Jeff Hoyt