As recently as 2007, 50% of all security clearance denials occured as a result of "financial considerations." In other words, "Your credit history makes you a security risk." That number applies to all branches of the military, by the way.
Do You Have to Have Good Credit to Get and Keep Security Clearance?
Good credit isn't a necessity to get and keep a job that requires you to have security clearance. What's crucial is that you do not demonstrate a state of financial need. The military wants to see that you are financially stable and not struggling with debt. If the military determines that your debt load is too high, they may just turn down your application for security clearance.
|The DoD can't risk careless workers spilling secrets.|
Collections Accounts Add to Your Allowed Debt Amount
There is no set figure you have to stay below in order to get and keep your security clearance. Experts estimate, however, that $3500 is the general figure to shoot for.
But what's more important that the amount of debt you carry is how you got there. For example, a reviewer will scrutinize a $500 collection account more closely than a $5000 student loan debt that you pay on time each month. Why? The collection account denotes carelessness and irresponsibility whereas the student loan account does not. Carelessness and irresponsibility are more important than the amount of debt you carry, because these factors make you a bigger security risk to your country. Thus, collections on your credit report are particularly dangerous if you're headed for a security clearance review.
Pay Off Collections Before Your Security Clearance Review
As much as I hate to tell anyone to pay off a collection agency, the simple fact of the matter is that, in a security clearance review, paid collections reflect far better on you than unpaid ones. Sure, it won't help your credit score and paying them doesn't result in them being removed from your credit report, but it reduces the debt load you carry and makes you less of a security risk. Keep in mind, however, that the very fact you had debts that fell into collections will count against you during your security clearance review. You may be asked to provide a written statement explaining the reasons behind the collections on your credit report.
If you plan to pay off collections before your security review, do so at least 60 days ahead of time. This gives the collection agencies time to update your credit reports accordingly, and for you to demand that they update your report if they don't do so within 30 days. You can choose to pay at the last minute, but if you do, make sure to get a statement from the collection agency noting that fact and noting that you have a zero balance. You can show this statement to your reviewer in lieu of an updated credit report.
Security Clearance and Bankruptcy