Most service members know that criminal conduct, foreign influence, and foreign preference can result in losing one's security clearance, but what about credit card debt? Recent decisions by the Department of Defense's Office of Hearings and Appeals (DOHA) reflect that excessive and delinquent indebtedness is now the No. 1 cause for denying or revoking a security clearance.

America's armed services suffer from the same financial problems as the civilian population, including spouse lay-offs, foreclosure, high interest auto loans, and mounting credit-card debt. One of these problems may not be cause for concern, but multiple debt delinquencies can indicate "poor lack of self-control, lack of judgment and unwillingness to abide by rules and regulations, all of which can raise questions about an individual's reliability, trustworthiness and ability to protect classified information," according to the Defense Department's Guidelines for Determining Eligibility For Access to Classified Information.

What can a service member struggling with debt do to help avoid an unfavorable judgment and potential loss of clearance? According to DOHA, putting a plan together is not enough. Taking action on that plan, however, could make all the difference.

Many service members are afraid to admit a debt problem and seek help, for fear that acknowledging the problem may jeopardize their security clearance. DOHA rulings, however, show that seeking help and taking action have made the difference for many. DOHA also considers the source of indebtedness a major factor. For example, overwhelming medical debts may not be viewed in the same light as a loan for an expensive automobile.

How Can I Reverse Excessive Indebtedness Before It Affects My Clearance Status?
Work with a personal finance manager at your base or nonprofit credit counseling agency to establish a reasonable budget and repayment strategy. "We have helped many service members manage their consumer debt," remarks Etta Money, President of InCharge Debt Solutions, a nonprofit credit counseling agency.

A stable security clearance is not the only benefit to paying down personal debt.  Improving your credit score by making payments on time and reducing your total debt can result in a lower interest rate for an auto loan or mortgage, more discretionary income and greater ability to save and invest for long-term goals. Additionally, civilian employment is often partially contingent on a healthy credit report, so cleaning up mutual debt could help a spouse in the job market. The bottom line is, the less you pay in monthly interest to service your debts, the more money you have in your pocket to achieve your long-term financial goals.

Military is the leading personal finance resource for active duty military, their families, and veterans. From the GI Bill to VA loans, frequent moves, and deployments, America's service members deserve timely financial information with their needs in mind. Serve. Save. Be InCharge.