How Your Personal Finances and Credit Score Affect Your Security Clearance

Personal money mismanagement is the number one reason security clearances get revoked. And if security clearance is a requirement for your position, you need to understand how to maintain it, so that your financial standing isn’t further jeopardized by a lack or downgrade in employment.

“From the United States Office of Personnel Management”
That’s a letterhead you’ve probably seen quite often, but this article is not being written by someone at the OPM. Rather, this article is being written by a personal finance expert who may or may not have once held a security clearance at a major U.S. Combatant Command. Other experts have contributed to this article as well.

The purpose of this article is to explain, in clear terms, how a person’s finances directly impact their ability to obtain and retain a security clearance with the U.S. government. We’ll discuss the role of credit scores, and provide some rough guidelines for determining what score you’ll need to retain your clearance (though as you’ll see, it’s often not that simple). Furthermore, we will give government employees specific advice on what to do if your personal finances are about to get you in trouble at work.

What the U.S. Government Has Publicized on This Matter

The U.S. Office of Personnel Management is the agency that controls security clearances for all government bodies, with the exception of the Nuclear Regulatory Commission (though the guidelines for that entity are very similar).

In 2008, the following information was made open source, in an attempt to increase government transparency. It came in the form of a memo to the heads of departments and agencies, chief human capital officers and agency security offices. It was called the security clearance decision-making guide. In the guide, you can find “Guideline F: Financial Considerations,” which discusses personal finances in relation to security. It’s incredibly interesting. The reason the OPM cares about your personal finances is because it believes:

Failure or inability to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness, and ability to protect classified information.

The document goes on to say that someone who has too much debt may be drawn to illegal activities or to taking bribes for money, thus it’s irresponsible for the government to employ such a person. On the other end of the spectrum, too much affluence can be a red flag. That is, if a person’s net worth is too great for their reported income.

According to Doug Nordman, retired member of the U.S. Navy’s submarine force and founder of

The U.S. military wants servicemembers to be financially responsible. That doesn’t always translate to ‘stay out of debt’ or ‘save for retirement,’ but supervisors watch for signs of financial stress. It’s all too easy for a junior (officer or enlisted) to be suspended from handling classified material, and debt issues can contribute to that.

Warning Signs

If you are worried about your financial health and how it will impact your job, this is exactly how it can. Don’t let your personal financial situation show any of the following signs…

Inability or Unwillingness to Satisfy Debts

Having mismanaged debt is grounds for loss of a security clearance. This is applicable for both “good debt” and “bad debt.” That means that even debts that are typically thought of as “investments” (like student loans and mortgages) are taken into consideration. Of course, “bad debt” (credit cards, payday loans, etc.) is even more concerning to the OPM, especially if you have no realistic repayment plan.

Deceptive Financial Practices

You’ll also want to steer clear of the following: “Embezzlement, employee theft, check fraud, income tax evasion, expense account fraud, filing deceptive loan statements, and other intentional financial breaches of trust.”


Failure to file taxes or committing tax fraud–that’s a big no-no for anyone. But you work for the government, remember?

Compulsive Gambling

Concealment of gambling losses, having family problems due to gambling, etc. can reflect poorly on your character and your perceived financial stability.

What about credit scores?

A credit score is a universal three-digit number we can all understand. So what credit score must you maintain in order to keep your security clearance? 600? 650? Are you at risk even at 700? It turns out that this question is not so simple.

According to the Office of Personnel Management, credit scores are not a factor in security clearance assessments. That’s because your credit score is based on a different set of criteria than what the OPM cares to use for its assessments of your financial security. So although a credit score is a decent indication of your financial health overall, it’s too broad of a brush for the U.S. government. Plus, there are many, many types of credit scoring systems available, so no single score ever tells the entire story.

So, while there is no perfect answer to this question, there is still likely a correlation between higher credit scores and retained security clearances. You may have heard the general rule of thumb is that scores above 750 get the best mortgage rates, and those below 650 are below average. Keep that in mind. Again, a score below 650 alone will not endanger your clearance, but it likely is a sign of some financial issues that you should address.

What Now?

If you are at risk of getting your clearance revoked – there are many things you can do get back on solid ground.

Ellie Kay of teaches financial readiness in conjunction with military readiness on military bases around the country. She has this crucial tip:

My best advice is to go into the family readiness center and get free financial advice tailored to your needs. They can set up a spending plan, a debt repayment plan and advise you on any loan BEFORE you acquire a loan. They also offer classes on how to buy a car, how to invest in the TSP and how to talk about money with your partner. At the last AFB on our tour, the average incoming Airman had 24k in student loan and consumer debt. So talking to an AFC (Accredited Financial Counselor) about student loan repayment options is also a good idea. One of the primary goals of our tour is to help military members keep their security clearances.

You can also sign up for Military Saves. It’s a program that encourages members to automatically deduct part of their pay into a savings account. The campaign enrolls tens of thousands of members each year.

If you have student loans, note that they qualify for deferment if you’re active duty. You may even qualify for the Public Service Loan Forgiveness Program, which could free you of your student debt burden.

If credit card debt is holding you back, you should try a free credit counseling service, like what Clearpoint offers, which will give you an overview of where you stand along with a plan for moving forward. There are also programs through credit unions which might provide unique benefits to military members or government employees who want to consolidate their debt.

And don’t forget about the Servicemembers Civil Relief Act (SCRA), which financially protects those who are training, in battle or absent from duty due to an injury or granted leave. Some key benefits of the SCRA include: state tax relief, cancellation of auto leases, ability to break housing contracts, legal protection from credit terms being changed and more. The SCRA basically keeps a military member’s financial situation from spiraling out of control while they are serving their country. SCRA benefits are extended to spouses as well.

Debt Relief Scams to Avoid

Alternatively, there are many military-centric debt relief scams to avoid. When trying to decide if a company is a scam or legit, here are four main things to consider. These are based on tips from Spencer, an officer in the U.S. Air Force and founder of

  1. If you work with a debt relief company, ensure that they are a member of the National Foundation for Credit Counseling (NFCC). Clearpoint is an NFCC member, and the US Department of Justice recommends NFCC-certified counselors.
  2. Look at the fees charged. Standard credit counseling should be free, while a Debt Management Program may cost a monthly fee. If the fees are not transparent and/or the agency dodges questions about fees, that’s a red flag.
  3. Google search “company name complaints” and “company name reviews.” It’s very hard to hide negative reviews about a company online. If lots of horror stories start coming up, run away. Be sure to look for reviews on third party websites, not just on the company’s website.
  4. Finally, if what the company sounds too good to be true, then it probably is. Any claims that a settlement can be reached that will reduce your debt by 50% or more is probably impossible. In fact, you should almost always avoid debt settlement, so be sure to start with a nonprofit credit counseling agency instead.

Spencer also says that if you contact your services’ aid society, such as the Navy-Marine Corps Relief Society, Air Force Aid Society, or Army Emergency Relief, they can also point you in the right direction.

Final Word

If debt is risking your security clearance, get it sorted so you won’t need to worry about the number one reason people get their clearances revoked. After all, you don’t want to be a part of that statistic. Remember that credit scores are just one piece of the puzzle, and even then they aren’t a direct factor in your clearance, just a general sign of your financial health. Perhaps more importantly, remember that assistance is available–hopefully now you know where to turn and how to move your financial standing toward a positive trajectory.

Will Lipovsky is a webmaster and personal finance freelance writer. His most embarrassing moment was telling a Microsoft Executive, "I'll just Google it." You can read more about Will at

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2 responses to “How Your Personal Finances and Credit Score Affect Your Security Clearance”

  • HanhDuong

    How can I clear me credit score and improve it.


    • Emilie Burke

      Hi Hanh! Unfortunately, you can’t just clear your credit score, but you can improve it by making diligent regular payments on all your bills and remedying any negative marks on your score. I’d suggest scheduling a free meeting with one of our credit counselors who can help you make a plan to address your credit score.