7 Ways to Protect Your Credit When You’re on Active Military Duty
The last thing members of the military want to think about while on active duty is probably their credit score, but being deployed abroad with limited internet access makes you vulnerable to identity theft and fraud. Additionally, bills and payments may slip through the cracks during this time, which can be detrimental to your credit score and seriously limit your financial options when you return home.
This article will guide you through some steps you can take to make sure your military duty doesn’t damage your credit. First, let’s take a look at some government policies you need to know about.
Government policies that can help protect your credit
The U.S. government has long recognized that service members require extra financial protection, and it has adopted multiple policies that provide it.
In 2003, the U.S. government enacted the Servicemembers Civil Relief Act (SCRA) to ease the financial burdens on service members during active duty. The SCRA, a federal law that revised and expanded the Soldiers’ and Sailors’ Civil Relief Act of 1940 (SSCRA), provides financial protections that cover “rental agreements, security deposits, prepaid rent, evictions, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, civil judicial proceedings, automobile leases, life insurance, health insurance and income tax payments.”
For instance, the SCRA states that credit card companies and mortgage lenders may charge active-duty service members no more than 6% interest on debts they accrued before going on active duty. Once the period of military service is over, lenders cannot charge the service member for the forgiven interest. However, service members must request the benefit in writing.
In 2006, the government enacted the Military Lending Act (MLA), which provides service members and their dependents with further protection from high-interest lenders. According to the MLA, military personnel on active duty cannot be charged an interest rate higher than 36% on most consumer loans, including payday loans, vehicle title loans, overdraft lines of credit and most installment loans.
Aside from the protections offered by the U.S. government, service members can protect themselves and their families by taking the following actions before going on active duty.
7 ways to protect your credit when you’re on active military duty
1. Put a fraud alert on your credit reports
A fraud alert is how consumers warn the three nationwide credit bureaus — Experian, TransUnion and Equifax — that they may be at risk for identity theft. Usually, someone will create a fraud alert after losing her wallet or Social Security card, or finding out her information was compromised by a hack. The alert, which is free and lasts for one year, requires lenders to take extra caution before issuing a line of credit in your name.
To implement a fraud alert, you need to contact only one of the credit bureaus. Whichever one you contact is required to inform the other agencies on your behalf.
- Experian: 888-397-3742; Experian, P.O. Box 9554, Allen, TX 75013
- TransUnion: 800-680-7289; TransUnion Fraud Victim Assistance Department, P.O. Box 2000, Chester, PA 19016
- Equifax: 800-685-1111; Equifax Information Services LLC, P.O. Box 105069, Atlanta, GA 30348
2. Consider a credit freeze
All three credit bureau agencies offer free credit freezes to military personnel on active duty. A credit freeze is a tool used by victims of identity theft to stop their credit from being used or shared. For instance, an application for a new line of credit would be stopped immediately if a freeze were implemented.
Beginning in 2018, military personnel were given access to this benefit whether or not they are victims of identity theft or fraud. You can lift a credit freeze by contacting the credit bureau and providing the PIN that was initially given to you when placing the freeze.
3. Apply for an active duty alert, specifically for deployed military members
An active duty alert notifies lenders that you are a U.S. service member on active duty. In turn, lenders are required to go to extra lengths when verifying the identity of an active military personnel inquiring about opening a line of credit. This added layer of protection makes it more difficult for fraudulent credit activities to take place under your name.
To activate an active duty alert for all three credit reports, contact any one of the three credit bureaus. The active duty alert remains on your reports for one year and can be renewed.
4. Sign up for credit and identity theft monitoring
Credit and identity theft monitoring are important tools for all of us. But they are especially important for active military personnel, who are probably not able to pay close attention to their credit report. These services monitor your credit and identity to prevent fraud. For instance, a credit and identity theft monitoring service may contact you if a company checks your credit history or if a credit limit changes. These services may also monitor your identity and alert you when there are changes related to your personal information, like if your Social Security number shows up in a payday loan application.
If fraud and identity theft do occur, recovery services can help with a plan to get you back on track. Check out the federal government’s IdentityTheft.gov website for free step-by-step resources.
5. Have someone you trust collect your mail
To protect your personal information from being stolen, make sure your mail is being sent to an address you trust. Consider asking a family member or close friend to pick up your mail while you are deployed.
6. Use strong passwords, change them regularly and use two-factor authentication
In the internet age, we need passwords for everything. The more difficult and complex your passwords, the harder they are for a hacker to figure out. The strongest passwords are ones that contain a random collection of letters (uppercase and lowercase), numbers and symbols and are at least eight characters long.
Once you’ve come up with a strong password, you’ll need to change it regularly. Also, refrain from using the same password for every account in case hackers get your information from a company’s data breach.
You should also consider using two-factor authentication, which adds an extra layer of security to your online accounts. You already use two-factor authentication when you’re asked to enter a PIN code after using your debit card or your ZIP code to accompany a credit card charge. The extra layer can go a long way to stopping hackers from stealing your identity when you are focused on more important matters.
7. Regularly check your credit reports
Checking your FICO Score and credit reports is a healthy habit to develop to ensure your financial history is correct and to catch any early signs of identity theft. Federal law entitles everyone to one free credit report per year from each of the three national credit bureaus. Your free credit report can be requested from AnnualCreditReport.com.
While on active duty, there will be a lot of things on your mind. Your credit score shouldn’t be one of them. Luckily, taking a few steps before deployment can go a long way toward making sure your score will be waiting for you, intact and ready to go to work, when you return. But if your credit takes a hit while you’re deployed, you may want to consider working with a credit repair service to get back on track.