Credit card debt for TS


About to fill out my SF86 and want some advice re: revolving (credit card) debt. I started a business last year (in addition to my salaried job as a professor), and it led to the accumulation of about $20,000 in debt. At this point, I could easily pay it all off with my HELOC, but I would prefer not to as my CC balance is at 0% interest until June 2019, and my HELOC has a 7% rate. Basically, will save me around $1,000 in interest to keep the balance on my CC.

I read an article recently that mentioned $7,000 in bad debt automatically triggers a more extensive check.

I was unable to verify this figure, but any insights would be most appreciated. I am trying my best to avoid a lengthly process, as the job is at State and they do not allow you to begin work until your clearance is approved.


What makes this “bad debt”? Are you behind? Making payments? Not expecting to pay it off?

I don’t believe that there is ANY number that would automatically trigger closer scrutiny. Moving the balance from a CC to HELOC is meaningless in terms of your debt. In fact, since the HELOC is at a higher rate, it makes you payments less valuable.

Is the $20K reasonable for the type and size business you started? Has there been a return on that investment yet?

I can pretty safely say that you aren’t looking at this the right way.

Hi Ed,
Thanks for the questions. I do not know what exactly is meant by “bad debt.” If you note the article I linked to, CC debt is considered bad but there is no other information given. My assumption (in reading the article and from other posts on this site) is that they mean unsecured debt, which a HELOC is not. Hence my thinking that it might be better to have the debt on my HELOC than on CCs.

I have not missed a payment or experienced a negative mark on my credit report in over 10 years, and only had one late payment before that. I live within my means and have had steady employment with the same employer for seven years (since graduate school).

I started a bar/restaurant with a few partners, and all of this debt is documented in a series of capital calls. We are not seeing a return on investment, but we are also no longer losing money.


You should be in the clear . . . They are going to run your credit and shouldn’t see any flags. I’m not even sure that this will come up except that you will need to report on your interest in the business.

As Ed mentioned, as long as you’re not missing payments on them, or have other financial issues like bankruptcies, not paying taxes, etc, the amount doesn’t matter so much as long as you’re meeting minimum obligations on your accounts.

There is an adjudicative guideline I remember reading somewhere (an IC guideline?) that mentions high utilization on cards being a cause for concern, but even then I’ve never seen it cited as a sole reason for denial on the DOD appeals site - I think for that to happen you’d have to be in an Aldrich Ames scenario where his minimum payments exceeded his salary (which raises an unaccounted-for income concern, and an entirely different rabbit hole)

Fact is, if you’re not in major financial distress and carry CC debt like a lot of Americans do, you’re the norm. If your BI noticed an extravagant style of living or unexplained possessions or your references citing extravagance, that’d be another concern to corroborate that “$7,000 of bad debt” trigger. >7K in bad debt isn’t a sole reason, per that article.

Thanks guys,

I am not too concerned about being denied, but rather trying my best to avoid a “second, more lengthly investigation,” as William Evanina describes in the article. He is at ODNI, so I have no reason to believe he is just making up this $7,000 limit on bad debt.

As I said, I am scheduled to begin my position at State in September, and they will not allow me to work on an interim clearance. If anyone else has any insight on this particular question re: automatic triggers of more extensive investigation, thoughts would be helpful.

Thank you both for your responses