Bureau urges servicemembers to ensure credit issues don’t affect their clearances

New directive provides for 'continuous monitoring' of credit histories

The Bureau of Consumer Financial Protection (BCFP) is warning servicemembers to heed new federal security clearance guidelines that provide for “continuous” monitoring of the financial status of servicemember with security clearances.

This monitoring, undertaken by the Department of Defense (DoD), “means that a past-due bill or an error on your credit report could jeopardize your clearance status,” the bureau said in a blog post Monday.

The bureau notes that military personnel are subject to a full background investigation and that many, 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. This used to be handled through an initial credit check when application is made for a security clearance and follow-up checks every five to 10 years.

“Following a number of publicized security breaches, the President of the United States issued a directive that all federal employees (including servicemembers) in national security positions shall be subject to continuous evaluation,” the bureau wrote. “This means that a person who is able to access classified information can have their background 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 having a high debt-to-income ratio.”

It continues, “This new process might impact your DoD security clearance and prevent you from being 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. Two of the most reported issues to the Bureau from servicemembers, veterans, and their families are issues with credit reporting and debt collection.”

New security clearance guidelines make it more important than ever for servicemembers to monitor their credit