Military life is one of frequent transitions. Each deployment, promotion, and change in duty status brings the need to make money-related decisions. These financial decisions can have long-term effects on family life, mission readiness, and security clearance.
Service members often run into trouble because of the irregularities in their daily life. They may tend to overspend and receive contact from debt collectors, fall for financial scams and become victims of identity theft, be denied loans because of credit report errors, or have a vehicle repossessed. Learning more about consumer credit and how to build a strong credit history can help veterans improve their financial health.
Take Advantage of Free Credit Reports
Under the Fair Credit Reporting Act, you’re allowed one free credit report within a twelve month period from Transunion, Experian, and Equifax. Send a letter to one of the bureaus and request your reports. Review them carefully to ensure that there are no errors and that you recognize all of the listed accounts.
Credit reports include personal information, credit history, credit inquiries, and public records. Your credit cards, mortgage, and any loans you have are all listed along with their payment status. If you fall behind on payments or default on a loan, your credit report will list this negatively. Negative entries may make it more difficult for you to open a new line of credit, be approved for a new loan, or receive a promotion or security clearance. It may also mean higher interest rates on loans where you have been approved.
Regular credit report checks help you monitor your accounts and determine whether someone has accessed your credit report without your permission or opened accounts in your name. If you notice suspicious activity, information that does not belong to you, or believe you have become a victim of identity theft, follow these steps.
Know How Much You Spend
A budget helps you see where you can cut back on spending and create a workable plan to pay off debt.Take the time to set a budget. Divide your regular expenses into categories and determine how much you can afford to spend on each category every month. Use a spreadsheet or online tool to keep track of all of your accounts and expenses.
Be Aware of Scams
Follow your gut. If it sounds too good to be true, it usually is. Unfortunately, service members are frequent targets for various scams. Companies or organizations could call and claim to belong to a veterans group or another legitimate sounding organization. Be sure to research the organization; find out where they're located, see if there is a complaint board online, and investigate whether the company is reputable.
Be cautious. Do not provide any personal identifying information, such as your social security number or date of birth, or access to bank accounts or credit and debit cards.
Financial Guidance for Service Members
Remember, you’re not alone. There are many services offered through the Department of Defense and veterans organizations to help service members keep their finances on track. Do your research and make a financial plan that is right for you.