Retirement — a magic word which conjures up so many images in our minds. Images of relaxing, traveling around the world, and spending more time with the family are the ones that are most prominent. In some cases, there are several people around the world who take up a second career post-retirement. It is also the time when you can finally relax and enjoy your free time since your finances are all sorted, all your debts are probably cleared, and you don't have to worry about your credit score anymore, right? Wrong. A credit score is crucial even when you have retired. So, why do you need it at a time when you are not working anymore? Here are the top reasons why you do:

To Avail Good Insurance Rates

Credit scores often determine the insurance premiums for your house and cars. When your credit score is high, it makes you look responsible. Hence, the premium might get lessened. When you have retired, you might have enough to live a good life, however, having what you think is enough money shouldn't be an excuse to stop saving what you can. In fact, saving shouldn't stop post-retirement. So, it is best to look around and find out which insurance company has the least premium. Your credit score will ensure that you get the best deal.

To Avoid Identity Theft

It is a common practice among retired people to stop monitoring their credit score as well as their credit history. People who don't check their credit reports regularly are  at greater risk of facing identity theft. It has been found that senior citizens and retired people are often targeted for identity thefts. It is, therefore, very critical to check your credit report every now and then to ensure that everything is as it should be.

To Refinance A Mortgage

Ideally, all your debts should be paid off by the time you have retired. But it has been found that almost 40% people retire with a mortgage. Since your financial conditions will change post-retirement, you might need to refinance your mortgage. A good credit score is a must in that case. When interest rates drop, you can easily refinance your mortgage if you have a good FICO score.

So, how can you rebuild your credit score once you have retired? Here are three ways that might help.

Get A Secured Credit Card

FICO says that in order to have a credit score, a person must have at least one credit account that is six months old. If you neither have any kind of loan nor paying any mortgage, then you must have at least a credit card. For those who do not have a credit card, apply for one, and make sure to get the one that is secured. Look around, and opt for the one that suits your needs. Some cards have a money/cash back offer, while others have discounts on  selected restaurants and other food establishments. Choose the one that goes with your spending habit. Once you get the card, always pay off your bills on time. In a few months time, you will have a good credit score.

Use Your Credit Cards Frequently

Use your credit cards as often as you can to pay for your expenses. When paying credit card bills, make sure that you pay the full amount if possible. This will ensure a good report. If you cannot pay the entire amount within the stipulated time, you might have to pay interests. Also, try not to pay the bill late. This will have a negative effect on your credit history.

Keep Your Old And Unused Credit Cards

Chances are, there might be unused credit cards lying in your wallet. Wait! Do not throw them away. Thanks to a gem called a credit utilization method, even your unused credit cards can boost your credit score. This ratio measures your total available credit limit and the amount of credit that you have used. If you use too much of your credit balance, it might affect your credit score. When you have multiple cards, even if they are not used, their credit limit gets added up, and, thus, it gives a boost to your credit history.

Before going into retirement, it is necessary to know information like this that will help you once you have retired. A credit score is important throughout your lifetime. So, never neglect your credit history as doing so will ensure you a more relaxed retirement.