How to Tackle Credit Card Problems and Obtain Security Clearance

Year after year, financial considerations continues to be the top reason for security clearance denial. Maybe things have snowballed: you lost your job, you took out loans, worked up high interest credit cards, and can’t dig yourself out of the hole. There are mitigating factors when it comes to debt and security clearances, but you have to be strategic.

zo_ie writes:

First time here. I’m a bit concerned on some factors regarding secret clearance as I’m new to the process and was given a preliminary clearance questionnaire that asked about basic questions the SF86 would ask, and one was about default loans/bankruptcy etc. I had a loan that got charged off in 2022, and I had no idea I thought it was on auto pay and notifications were sent to an inbox I wasn’t monitoring at all at the time. I remembered it last year and paid off about half, it was 1700, so there was about 800 left. I paid off most of it a couple of months ago before being laid off, and I finished off paying the final 160 yesterday.

I have a couple of maxed credit cards, and my credit score is 620~ give or take. I’ve only ever missed 2 payments in the past 10+ years, showing a 99% payment history. My plan is to ask a buddy to help pay off my cards and I’d pay him back, and doing some simulations it would spike my score up to 700+. Would I have a any trouble with getting a secret if this was all done after accepting the job offer and doing the SF86?

tl;dr Credit score 620 atm, can get it to 700 by paying off 2 cards. I have 1 charged off loan in 2022 I was unaware of because I thought autopay was going through, it wasn’t, strong credit history otherwise. I just finished paying it off yesterday (the last 160). Will I have a strong chance at a secret or will this possibly hurt me? No other issues on the SF86 listed.

Debt can impact your security clearance application because it falls under Guideline F: Financial Considerations in the Adjudicative Guidelines used by clearance authorities. Here’s how it works:

Why Debt Matters

Large or unaddressed debt may suggest poor judgment or unreliability, vulnerability to bribery or coercion, and/or a pattern of irresponsibility. The government wants to know that you’re not in a position where financial desperation could lead to compromise. As historic headlines show, money exchanged is one of the biggest drivers for committing treason or espionage,

When Debt Is Not a Dealbreaker

You can still be granted a clearance even if you have significant debt if you’re:

• Taking steps to resolve it (payment plans, bankruptcy, etc.)

• Being transparent (you disclose it rather than it being discovered)

• Demonstrating responsibility (even if your situation is tough)

Adjudicators are looking for patterns of behavior, not just the numbers on your credit report. One investigator on the blog says, “You paid off the one loan (2022 charge off) so that is good. As far as “maxed out” credit cards, I think if you are at least making the minimum payment and not incurring any late fees, that is OK (though not great).”

However, a few maxed out credit cards and a recent loan issue could show this pattern of behavior that adjudicators are looking for. Might not be automatically disqualifying, but it will certainly be a topic of conversation throughout the background investigation.

In any security clearance scenario where you are an applicant worried about debt, you should:

• Self-report financial trouble early. It shows you’re proactive.

• Get documentation of any debt resolution efforts.

• Avoid new delinquencies during the clearance process.