Credit Debt Question

I received a LOI to hire as a DoD civilian. I am super excited, because I have been out of work for 10 months. Unemployment, which already wasn’t enough to cover bills, ran out and I was forced to focus only on secured debt (house, car). This means my credit rating is in the toilet.

Prior to losing my job (no fault of mine), my credit was fine, in the low 700s.

Am I right to worry about passing the security clearance? The requirement is for a secret clearance.

Yes, I think you’re right to worry about obtaining a clearance - but I would say that to pretty much everyone.

OK, having scared you, it’s not by any means guaranteed you won’t get a clearance. Economic/financial/credit issues aren’t uncommon. They’re also never fun to disclose or discuss, especially with strangers. Best advice is what you’ll see repeated in so many answers on the blog - when you get the clearance paperwork or get on the web site, read the questions thoroughly and carefully. I’ll say the two important words again: thoroughly and carefully. Understand that some are asking “have you ever” and some are asking "have you in the previous " number of years. Make sure you know the timeframe for the question to which you’re responding.

Specifically to financial issues, you’ll need to know if you’ve had late payments, and if so, how many days late. You’ll need to know if any accounts have been in collection. If so, how many, and for how much? Have you made arrangements to pay those amounts? Stuff like that related to numbers, amounts, and timing. The more solidly in command of the facts you are, the better.

Also make sure you pull your credit report beforehand to be able to list the most accurate info.

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Unsolicited advice, so take it for what it’s worth;

When filling out your SF, pull your credit report (not your FICO score, your actual report) from all three bureaus. All three will be pulled within days of submitting your paperwork, so get current ones from The Big Three. Go through your reports and be certain to list each and every derogatory incident (late payments, items that went to collections, charge offs, etc). As noted before, read each question carefully. Some have a time frame, some are “ever” questions.

Be prepared to fully discuss any and all financial issues, even if they were not required to be listed, as they may still pop up. Trust me, no Investigator who has worked more than a week in the field is going to judge you. They are going to dig for all information…who, what, why, when, etc.

I think of it as a time line. Start with what happened, and go through the steps (on each account) until present day, including what you have done to resolve the debt, and what steps you have taken to lessen the chance of it happening in the future.

Lastly, who is aware of the debt (your spouse, your friends, etc) and can it be used against you as blackmail.

Financial issues are the number 1 reason clearances are denied. That doesn’t mean you don’t stand a chance, it means that you need to lay out fact as to what happened and how you are mitigating the issue.

Best of luck to you, been there, done that. It’s tough but not impossible.