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5 Ways Credit Impacts Military Members Differently

This post is sponsored by Lexington Law

Being in the military presents many unique challenges when it comes to money, financial management, and credit. Military members and their families move frequently due to deployment and orders. There can be gaps in income, frequent informational changes, as well as informational gaps and periods of not knowing what lies ahead. All of this can lead to a long and confusing financial record to keep track of. 

These things can leave members of the military and their families financially vulnerable. There are federal laws that are aimed at protecting military service members but credit reporting doesn’t always fairly reflect that. Military service has its own unique benefits when it comes to credit, as well as disadvantages that you might find useful to know.

5 Ways Credit Impacts Military Members Differently 

1. You can put an Active Duty Alert on your credit report.

Did you know that if you’re active duty military personnel you can place an Active Duty Alert on your credit reports? This requires lenders to apply certain procedures and policies to verify your identity before issuing a line of credit. This helps to prevent fraudulent accounts being opened in your name and adds an extra layer of protection against identity theft when you’re vulnerable abroad.

According to Experian:

An Active Duty Alert remains on the report for one year. It notifies creditors that you are a member of the U.S. military and that you are currently on active duty. An Active Duty Alert does not require a lender to contact you directly to get your approval before granting credit in your name, but it does ask them to verify the identity of the applicant first. If you choose, you can add a telephone number where you can be reached to the alert.

To activate an Active Duty Alert for your credit report, you need to contact on of the three credit bureaus. After you have completed the initial process, the bureau you contacted will contact the remaining bureaus on your behalf.

2. Bad credit can keep you from enlisting or receiving a security clearance.

Did you know that some branches of the military also run a credit check? This is typically done as part of the background check for security clearances but can also be done for those who are interested in enlisting.

Poor or bad credit can illustrate that the person in question might be untrustworthy or irresponsible. It might also be cause for concern regarding work performance because the person might need a second job to cover bills or make ends meet. 

If your credit is declining, you might want to focus on taking steps to improve it if you are up for promotion soon. If a credit check is run as part of your promotion, poor credit can keep you from getting the necessary security clearance.

3. Deployment makes you vulnerable.

When you are deployed, you often have limited access to the internet or a reliable phone line which makes managing your finances difficult. It’s important to make sure all of your bills are paid on time at home. Missed payments can easily slip through the cracks and go unnoticed for months at a time. 

If you haven’t already, it’s a worthwhile idea to have point of contact stateside who can make sure your bills and recurring payments go through each month. You need to make sure this is someone you can trust and rely on, though. As my friend Alex learned through his deployment, your credit score can go from good to bad in a matter of weeks with poorly managed finances.

During a deployment, you might not be able to check your credit report or other financial transactions either. It’s advisable to check your credit report before you leave so you have a reference point of what was on your credit report beforehand. You can do so at  

I also recommend (to everyone, not just military members!) to set up identity monitoring. An identity monitoring service, like Lex OnTrack, to keep tabs on your identity. Lex OnTrack will notify you of changes to your credit report, give you your FICO® Score, provide a credit score analysis, offers basic credit repair, and includes $1,000,000 in identity insurance. This can give you peace of mind when you’re not able to fully focus on your personal finances.

Related: Lex OnTrack Review: Why You Should Monitor Your Credit

4. You can take advantage of a free credit freeze.

You don’t have to be in the military to do this, but it is particularly helpful for service members, especially when deployed. According to the credit repair consultants at Lexington Law,

[In] the first half of 2018, EquifaxExperian, and TransUnion [began] offering the option of free security freezes on credit files for eligible members of the United States Armed Forces. The new credit freeze allow[s] service members to place, lift and remove a security freeze on credit files at no charge, even if you have not been a victim of fraud or identity theft. A security freeze prevents sharing of your credit information with anyone without your explicit permission.

A credit freeze, also sometimes called a security freeze, is another layer of protection against fraud and identity theft. When you place a freeze on your credit report, no one is able to access your report. The freeze must be lifted using the PIN (personal identification number) given to you when the freeze is applied. 

In order for any potential lenders (like a credit card provider, insurance company, cell phone company or even your employer for background checks) to gain access to your credit report, the freeze will need to be lifted.

To place a freeze on your Experian credit report, go to the Experian Freeze Center or call 1-888-EXPERIAN. There is more information here on placing a security freeze.

5. Frequent information changes and moves lead to lost documents and information.

When you’re moving so frequently, critical and sensitive documents can get lost and misplaced. If do not already have a designated space or a file safe for your documents and account information, this should be a top priority. Sensitive information like your social security number, life insurance policy numbers, and passwords can not only lead to identity theft but make you extra vulnerable or put your security clearance at risk.

When you no longer need some of your sensitive documents, make sure to shred them and dispose of them properly so they don’t end up in the wrong hands.

What To Do About Your Credit As a Military Member

Members of the military face unique challenges when it comes to their finances. Particularly due to the nature of the military with frequent moves, deployments, and gaps in pay. 

There are federal laws that protect you while you’re on active duty. However, the information reported to the three credit bureaus may not always reflect those protections. This can leave you in a sticky situation with a dropping credit score and with potential errors on your credit report.

Before throwing your hands up and accepting this as reality, be aware that there is help available to you!  There are consultants who are knowledgeable on the laws, federal statutes, and consumer protections who can advocate on your behalf.

If you do find yourself in this situation, contact the consultants at Lexington Law for additional information and to explore your options. Lexington Law offers a specific credit repair focus tracks just for members of the military. Contact them for more information and an initial consultation by clicking here.

If you know anyone in the military or are considering joining yourself, forward or save this post for reference! 

About the Author

Nicole Booz

Nicole Booz is the founder and Editor-in-Chief of GenTwenty, GenThirty, and The Capsule Collab. She has a Bachelor of Science in Psychology and is the author of The Kidult Handbook (Simon & Schuster May 2018). She currently lives in Pennsylvania with her husband and two sons. When she’s not reading or writing, she’s probably hiking, eating brunch, or planning her next great adventure.