It can be hard for military families to maintain good credit scores because of the constant moving, changes in their jobs, international deployments, and inconsistent income for military spouses. While these things can all make it challenging to maintain high credit, military families are also afforded other advantages that can help solve that issue.
Steer Clear of Bad Debt
Steering clear of bad debt is the best thing you can do to begin boosting your credit for anybody. Bad debt is just any debt that costs a lot of money in interest with minimal return. So, credit card companies and payday loans that charge high interest rates and don’t offer any return other than that short-term loan are perfect examples of bad debt.
While some people may claim that all debt is bad debt, that is not always the case. Mortgages and student loans can be beneficial for you in the long-term, as long as they charge lower interest rates, because they give you something in return. Paying these debts off every month can also help improve your credit! Credit card debt, however, lowers your credit score. Keeping that balance at zero is ideal because it is expensive to have credit card debt and it hurts your credit. Avoiding bad debt like this from day one will benefit you in the long run.
Look for Military Credit and Loan Benefits
For military personnel deployed overseas, there are regulations in place that dismiss all annual credit card fees. The Department of Veteran Affairs also offers VA Mortgage loans for the families of those with a military member on tour outside of the United States. VA Mortgage Loans are loans backed by the government that offer military families mortgage loans with lower interest rates, sometimes even if they have lower credit scores. The Servicemembers Civil Relief Act also offers help for military families through restricting fees, terms, and interest rates for things like home rentals, auto loans, credit cards, and mortgages.
All of these tools don’t necessarily benefit your credit score in a direct way, but they do improve your general financial position. By doing this, you now have the ability to raise your credit score through other means, for example, reducing your bad debt. That gives you more flexibility with your finances and thus the ability to manage your credit more successfully.
Find Military Friendly Bank Accounts and Credit Unions
USAA is a perfect example of a financial institution made for military families. To even join USAA, you have to be active in the military, a veteran, or the child of a veteran. There are other institutions that offer benefits for military families as well, though. US News and World Report claims that these are the top ten banks and credit unions for military families:
Navy Federal Credit Union
Arkansas Federal Credit Union
Andrews Federal Credit Union
Randolph-Brooks Federal Credit Union
Fort Knox Federal Credit Union
USAA Federal Savings Bank
Langley Federal Credit Union
First Citizens Bank and Trust Company
Tyndall Credit Union
Air Force Federal Credit Union
It is a misconception that you have to live near a branch of one of these institutions to utilize their advantages. Most of the time, you can join while even living across the country to receive the benefits they offer for military families.
Locate Other Organizations Specifically for Financial Help
There are many free resources and organizations set up to help military families with their credit and finances, especially if you live next to a military base. Many of the organizations help both those in active duty service and veterans. Here are some examples of organization to contact if you want some financial assistance:
American Military Family
Coast Guard Mutual Assistance
American Red Cross
Veterans of Foreign Wars Unmet Needs Program
Navy-Marine Corps Relief Society
Air Force Aid Society
NACCRRA
Operation Homefront
Army Emergency Relief
The best thing you can do is take steps now to protect your financial future. Building and fixing credit can take a long time to do, so taking advantage of all the opportunities offered to military families early on can help set you up for financial success in the long run.
