New security clearance guidelines raise importance of watching your credit score

New security clearance guidelines raise importance of watching your credit score

New security clearance guidelines recently implemented by the federal government will require servicemembers with security clearances to keep their credit histories clean.

Previously, the federal government performed an initial credit check when servicemembers applied for security clearances, with follow-up checks every five to 10 years thereafter, depending on clearance level. After a number of public security breaches, President Trump directed that all federal employees in national security positions, including servicemembers, be subject to continuous evaluation.

The process could impact servicemembers’ security clearance and negatively impact their military career, according to a warning order from the Office of Servicemember Affairs at the Bureau of Consumer Financial Protection.

The OSA offered the following tips to servicemembers to safeguard their credit record and prevent problems with security clearance:

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. You can dispute any item on your credit report you know to be inaccurate, and the companies are required to conduct a reasonable investigation upon notice of a dispute. 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.

2. Consider setting up a fraud alert or security freeze.

Recent legal changes will provide servicemembers with free credit monitoring in the future to help better protect their credit record. This law takes effect in May 2019, and in the meantime, you can still contact Equifax, Experian, and TransUnion 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 also a special "active-duty alert" available to servicemembers on active duty who are assigned to service away from their usual duty station. The alert notifies credit reporting companies of your military status and limits new credit offers while you’re away.

3. Monitor your credit score.

There are numerous credit-reporting services that provide free credit scores, but servicemembers and their spouses can get a free credit score courtesy of the Financial Industry Regulatory Authority (FINRA) 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. Get your free credit score by contacting a personal financial manager at your closest military installation.

4. Call in reinforcements.

If you believe that your credit record is inaccurate, you can try to clear it up with the company that reported that information and the major credit reporting companies. You can also submit a complaint to the Bureau online or by calling (855) 411-2372.