Building, Tracking, and Protecting Your Credit on Deployment
Being deployed means that you probably won’t have a lot of hands-on control over your credit. Whomever you chose as your power of attorney and left in control of your finances will be tasked with handling most of your financial matters — including taking care of your credit. Building, tracking, and protecting credit are all important aspects to your credit health under normal circumstances. In a deployment setting you’ll have to go about managing your credit in a different way, although many of the same rules for responsible credit utilization still apply.
Building Good Credit
If you’d like to build your credit while you’re away, you’ll have to put a plan in place with the person handling your finances. This might be your spouse, your parents, or whomever you designate as your power of attorney (POA) – which is an important step in organizing your finances before you deploy. You’ll want to implement the same credit building strategies that you’d use if you were home, but have someone else manage them. Some options you can do before you leave, others require upkeep while you’re away, and by the time you’re home your credit should have some improvement. Some traditional credit building strategies include taking out a loan, getting a secured credit card, or becoming an authorized user on a spouse or parents card. However, it is a risky move to obtain more debt before deploying. Instead, work on managing your finances as they are now. Some of those strategies include:
- Create a Budget: Having a strict budget will make it easier to make sure things are paid, extra money is spent responsibly, and that your credit card balances are kept low. All of these things affect credit, so protecting it involves sticking to a budget designed to help your credit.
- Make a Payment Plan: This can range from setting up automatic payments where possible, to taking on authorized users or going over your budget with your POA. The important thing is to make sure that bills, especially any debts you have like loans, a mortgage, or other obligations will be paid on time. The best way to build positive credit is taking on debt and paying it off consistently. Don’t let your deployment change these good habits, and you won’t see your credit score hurt while you’re away.
- Manage Credit Cards: Especially if you are counting on automatic bill pay to cover your utilities, debts, or other bills while you’re deployed, you’ll need to make sure there is someone paying off your credit card every month. This has the double benefit of helping your credit score, and earning you rewards points on your credit card.
Monitor Your Credit
Tracking your credit will involve a little communication with your POA back home. In reality, many of us don’t have access to our exact credit score at all times. Requesting a credit report too often may be bad for your credit as well. So, in order to monitor how your credit is doing while on your deployment, focus on tracking your finances in general. Luckily the military can be a big help in terms of saving money and improving credit scores as long as you’re using your resources to pay down debt and plan for the worst instead of practicing poor habits like blowing your enlistment bonus. Implement a plan for your finances while you’re away, have your POA put the plan in place, and track the progress.
- Get a monthly report: Paying your bills, debt, and financial responsibilities on time is an important part of credit health. In order to ensure this is done, ask the person handling your finances to send you an email at the end of every month with your payment receipts. This way you can ensure that it’s done and you’ll know your credit isn’t being affected negatively.
- Get a copy of your taxes: If you’re deployed, the IRS can give you an extension on your taxes. If your spouse or POA is filing taxes for you, ask to have a copy sent to you. This way you have a good record of your financials over the year and you’ll know if you owe taxes at all, which can affect your credit score in the long run.
- Focus on maintenance: Tracking credit while you’re deployed is difficult, so instead focus on credit maintenance. Paying everything on time, using extra money to pay down debt, and not opening or closing any credit cards might be the easiest to track credit instead of changing your finances right when you lose some control over your finances.
Protecting your credit while you’re deployed may involve a lot of trust in the person handling your finances while you’re away. That person basically needs to be you in terms of your finances for the time being while you can’t be there to protect your credit. Protecting your credit means understanding what is bad for credit, staying on top of your finances, and knowing how to identify fraudulent situations.
- Consider credit monitoring: Check to see if your credit card offers any free services to monitor credit or protect against fraud. Be especially careful if you’ve been targeted before, or suspect your identity may be at risk.
- Knowing your options: Freezing your credit is an option in order to keep anyone from opening accounts in your name while you’re away with an active duty alert. For some this is the best way to protect your credit, just know you won’t be able to open any accounts to help your credit either.
- Understand how fraud and identity theft affect credit: Identity theft and credit card fraud are big ways to damage your credit. Avoid this by knowing the common schemes and protecting yourself. Know where your mail is going, instruct your POA to identify any odd purchases as soon as possible, and shred any sensitive information.
Your credit is tied to most of your financial possibilities throughout life. It’s basically a way for others to understand your ability to pay back a loan and a reflection of how trustworthy you are among the financial world. For this reason, it’s hard for many service members to deploy and leave their credit in the hands of someone else. However, there are ways to build, track, and protect your credit while you’re away. The key is making a plan and sticking to it. You may not have as much control over your finances or your credit for a while, but it doesn’t mean your credit will have to suffer as a result of your deployment. In fact, it may even get better.
For more tips and guides, visit our military support resource center. For more information on your credit score, visit our credit score learning center. If you’ve found an error on your credit report, visit our dispute letter resource center for information on contacting the credit bureaus.
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Chelsy is a writer from Montana who now lives in Boise, Idaho. She graduated with her journalism degree from the University of Montana in 2012. She enjoys talk radio, cold coffee, and playing Frisbee with her dog, Titan. Follow Chelsy on Twitter @Chelsy5