New security clearance guidelines are underway

| February 5, 2019 | 0 Comments

Guidelines require personnel to stay on top of their credit and bills

Verndal C.F. Lee
Chief of Legal Assistance Office

SCHOFIELD BARRACKS, Hawaii — The federal government recently implemented new security clearance guidelines that make it more important than ever for service members to stay on top of their bills and monitor their credit histories.

The Department of Defense (DoD) now “continuously” monitors the financial status of service members with security clearances. This means that a past-due bill or an error on your credit report could jeopardize your clearance status.

Personnel must keep abreast of their finances and protect them from cyber thieves. (Courtesy graphic)

Personnel must keep abreast of their finances and personal information to protect them from cyber thieves. (Courtesy graphic)

Military personnel are subject to a full background investigation. Many service members, including all officers, are required to have national security clearance checks that include detailed reviews of their credit history and ability to meet their financial obligations. Prior to the change in policy, the federal government performed an initial credit check when service members applied for their security clearances and performed follow-up checks every 5 to 10 years, depending on clearance level.

Following a number of publicized security breaches, the President of the United States issues a directive that all federal employees (including service members) in national security positions be subject to continuous evaluation. This means that a person who is able to access classified information can have their reviewed at any time, including an automated review of their credit file, to see if they have a history of failing to meet their financial obligations, being in excessive debt, or have a high debt-to-income ratio.

This new process might impact your DoD security clearance and prevent you from been deemed “deployable,”, which could greatly impact your military career unless you can prove to DoD that you were the victim of identity theft, fraud or a mistake, and that you’re currently living within your means and are making a good-faith effort to resolve your unpaid debts.

To safeguard your credit record and prevent problems with your security clearance, follow these tips:

  1. Check your credit report.

You are entitled to a free credit report every 12 months from each of the three major consumer reporting companies (Equifax, Experian, and TransUnion), which you can access at AnnualCreditReport.com. This is the only authorized source under federal law that provides free credit reports from the three major national credit reporting companies. Other websites that promise free credit reports may require you to sign up for “free trials” that eventually charge you or try to sell you other products or services you may not need.

  1. Consider setting up a fraud alert or security freeze

You can contact the three major consumer reporting companies and ask them to put a freeze on your credit reports. A freeze prevents prospective lenders from accessing your credit file unless you lift the freeze for that lender or for a specified period of time. There is a special “Active Duty Fraud Alert” available to service members who want to lower their risk of becoming a victim of fraud or identity theft while they are deployed overseas. This type of alert lasts for one year and can be renewed to match your deployment. The alert notifies credit reporting companies of your military status. Creditors must take reasonable steps to verify that you have applied for new credit, loans or higher credit limits.

  1. Monitor your credit score

There are numerous credit-reporting services that provide free credit scores, but service members and their spouses can get a free credit score courtesy of the Financial Industry Regulatory Authority investor education foundation. This free credit score is intended to help you understand how your decisions alter your score in a positive or negative way. To use the tool, your first step is to contact a military financial educator (sometimes called a “PFM”) at your nearest Personal Financial Management Program (PFMP) Office (which is usually part of Army Community Service). Your Financial Educator or PFM can assist you in obtaining your free credit score.

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