How much debt is too much?

SECURITY CLEARANCE Q&A
1

I currently hold a TS/SCI clearance.

I have owned my home for the last 7 years with no missed payments. My mortgage has $270k remaining. I own one car outright and have a loan for $19k on a another car that I have paid on time for the past three years.

Additionally, I have $40k in credit card consolidation loans that are all paid for and on time. I have another $30k in credit card debt that I am attempting to consolidate however all of my credit cards and loans are completely paid on time.

I make $185k per year. I also have $100k in 401k with $5k in my HSA.

The reason I mention that is to show I can afford the debt albeit it may not be the best thing to do from a financial planner point of view. My credit is 700.

Question is do they look at things like revolving credit and say that’s too much or as long as everything is paid it generally doesn’t matter ? I suppose someone in California could have a $1million dollar home and that would be OK for that area.

2

Your assumption is correct. Keep paying all your financial obligations on time. Perhaps there is some sort of generally acceptable of debt/income ratio but many people have other legitimate sources of income. (spouses, rental income/part time jobs etc.) Your debts look very typical.

3

Depends on the agency requesting your clearance. Some background investigations require very detailed credit report review including debt to income ratio, explanations etc and some only look for delinquencies.

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4

Did debt consolidation require you to stop paying on some credit cards?

If so, will need to be reported.

5

No, I paid them off. Nothing was charged off or late. I just changed it from revolving debt to a fixed loan. I still have some revolving debt left

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