It is important to build your credit wisely as a member of the Armed Forces. Having reliable credit to draw upon is an excellent benefit, but you should use credit when you have to only. One of the biggest advantages of having excellent credit is having it there when you need it.
One place to investigate is the local Federal Credit Union on your base, or in your area. There are benefits eligible to you as a member of the Armed Forces that allow lower interest loans, or give you advantage to access services at preferable rates. Credit Issues to address in building an excellent financial history are:
Get out of Debt:Â Live within your means, and work to gradually bring your debt down, or to eliminate it.
Card Reduction: Use a single credit card, one that has low or no fees attached, or even use a debit card instead of a credit card.
Cash Out To Reduce Debt: If you have a large amount of debt, and a savings account, it makes financial sense to use savings to pay off the debt. While the debt exists, the amount of interest normally vastly overshadows any interest your savings gains. So reduce debt first, then focus on savings.
Access Professional Services: If you are at the point of crisis, then there is help out there. Consumer Credit counseling, or other professional debt services can help you work out a plan, and sometimes they help you think of things you might not know about, or that don’t occur to you.
Avoid Bankruptcy: If you are struggling, attack the problem and find a solution. Don’t wait, it only gets worse over time. And use bankruptcy only as a last resort, it stains your credit and can affect you in the area of security clearances. Having good credit is really important.
Here are some other things to keep in mind when using your credit:
Close Accounts: If you have multiple accounts you don’t use, then pay them off and close them. Having an excessive amount of credit accounts open hurts your credit score, so pay off your extra accounts and close them.
Track Expenses: Many people use their credit statement to track their spending. This is a foolish idea. It is important to establish some method of keeping records; you should write down or keep a journal of your spending. Not only will it raise your awareness of where you spend your money, but it also helps with accuracy.
