March 17, 2017, by Beth Kotz – Serving in the military can be a rich and rewarding experience but it also presents many challenges. One frequently overlooked issue service members face is the challenge of keeping their finances in good order. A good credit score and a strong, established history are essential to many aspects of civilian life, from attaining a good job to qualifying for a mortgage or car loan. Unfortunately, your finances can’t simply be put on hold while you’re serving your country. To stay in good standing, here are a few important tips to maintain good credit while serving in the military and help keep your financial house in order.
Save, Save, Save
Stashing away cash is good advice in virtually any situation, but it’s essential for anyone serving in the military. Take every opportunity to save as much money as you can, placing it in a savings account where it can help you pay for future plans and cover unforeseen expenses. Active duty may provide an excellent opportunity to save given that certain daily living expenses are covered by the military but you can save regardless of your status by eliminating nonessential expenses. It may also be beneficial to enlist in the “Military Saves” program, which automatically deducts a portion of your income and places it in a savings account.
Set a Financial Strategy
You wouldn’t go into battle without a solid plan so why would you leave home without first creating a financial strategy with your loved ones? Take some time to create a basic budget and review it with your family, paying particular attention to any debts that must be paid. Determine a spending plan that makes sense for your financial situation and consider eliminating unnecessary costs and using the savings to pay down credit cards and other high-interest debts.
Use the Power of Technology
While you probably won’t be browsing the web in the middle of a battlefield, most active service members have at least occasional internet access. Make sure you use it to your advantage by monitoring activity on your bank and credit accounts, setting payment due date reminders and signing up for automatic payment processing wherever possible. Many banks also offer online budgeting programs and other financial tools, which can make it much easier to stay on top of your finances no matter where you might find yourself.
Maintain Overseas Financial Records
Just because you’re stationed overseas doesn’t mean you can’t work to build better credit. You’ll still need to make purchases while you’re away and if you take care to save all relevant records of your financial transactions, you can use them to help establish a credit history. You may even wish to apply for a dedicated military credit card. It’ll help you build positive credit if you use it wisely, and many military cards offer reduced or eliminated fees, military-specific rewards and an assortment of other perks for service members.
Monitor Your Credit Reports
There is perhaps no more important step to building great credit than regularly reviewing your credit reports. Your credit report lays out all of the information used to determine your creditworthiness and inaccurate information could end up crippling your credit score without you even knowing. If you find any discrepancies, promptly contact the credit reporting agency and notify them of the issue. Many online services offer a free annual credit report but active military members and their spouses can also obtain free credit information through a nearby Personal Financial Management Program (PFMP) office.
Set an Active Duty Alert
If you’re getting ready to deploy, give yourself and your finances some added protection by placing an active duty alert on your credit report. An active duty alert notifies businesses and financial institutions that you’re currently serving and requires them to take a number of additional steps before granting any credit in your name. This helps to protect you from any fraudulent activity without compromising your ability to get credit if you need it. Active duty alerts can be set by simply contacting any of the three main credit reporting agencies. An alert will remain active for one year, though it can be extended as needed to match your deployment schedule.
As an active member of the military, you undoubtedly have a lot on your plate. You shouldn’t have to worry about the state of your finances while you’re serving and by practicing good credit habits, you can put those concerns to rest. Simply follow the tips above and you’ll be well on your way to building and maintaining the strong credit history you’ll need to live the life you want.
Beth Kotz is a contributing writer to Credit.com. She specializes in covering financial advice for female entrepreneurs, college students, and recent graduates. She earned a BA in Communications and Media from DePaul University in Chicago, IL, where she continues to live and work.