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Protecting Your Credit While You Are Deployed

Protecting Your Credit While You Are Deployed

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This article was last updated Nov 03, 2015, but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.

If you’re in the Armed Services, your lifestyle is dramatically different than that of most Americans. On a moment’s notice, you could be ordered to deploy anywhere in the world, and sometimes you may need to uproot your family. Those kinds of sacrifices can put you in harm’s way, and they can also put an unusual strain on your financial life. Small conveniences that others take for granted – like receiving monthly statements in the mail or managing your accounts online – may be impossible if you’re active in the military. Because of these extraordinary circumstances, there was an entire agency within the Consumer Financial Protection Bureau created just for you.

The Office of Servicemember Affairs

A few years ago, a special department called the Office of Servicemember Affairs (OSA) was created under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The OSA, which is a branch of the Consumer Financial Protection Bureau, exists to protect the rights of members of the military and their families. Some of the key goals of the OSA are to ensure that military families receive adequate financial education, and that governmental agencies coordinate their activities to improve consumer protection measures for military families. The OSA also listens to and responds to complaints and questions from military families regarding consumer topics. Between 2011 and the end of 2014, nearly 30,000 complaints to the OSA were lodged by servicemembers.

The OSA recently issued the Fraud Alert Fact Sheet, which is a free resource for service personnel that you can be viewed online or downloaded. It is filled with info about how to safeguard your credit when you’re serving away from home. One of the tips is to use what is known as a Security Freeze on your credit report. The protocol for setting this up varies from state-to-state, and may cost a nominal fee of about $15 to initiate. When you cannot monitor your files, though, it can be a great tool for protecting your finances.

Security Freeze Info

A Security Freeze blocks the release of your credit file to new lenders, giving you increased protection and peace of mind. No one, not even you and your family members, can borrow in your name while the Security Freeze is active. If a Security Freeze is in place, for instance, and you try to apply for a new credit card, you’ll have problems because the bank will not be able to view your credit report. The way around that is to lift the Security Freeze, then apply for the credit card, and once you’re done, you can put the Security Freeze back into action.

Basically, you don’t want to use this mechanism if you are planning to open a new credit account, because it can take a couple of weeks or so to lift the freeze. But if you’re deployed and want to keep bad guys from opening accounts in your name, it’s a pretty foolproof tool to lock down your credit.

Active Duty Alerts

Another powerful tool that the experts at the OSA recommend is the Active Duty Alert, which will notify companies looking into your credit of your military status. It alerts them that they should take extra precautions to verify the identity of any person who is requesting new credit in your name. The alert will also generally prohibit credit reporting agencies from providing your name for new prescreened credit offers for two years.

Unfortunately, very few people sign up for these protective alerts. Over the past 2-3 years, 650 active-duty servicemembers submitted complaints to the CFPB about their credit reports, and one in six of those complaints involved reports of identity theft or account misuse. But very few of those service personnel who complained put an Active Duty Alert in place before leaving for service.

The Final Word

The takeaway here is that if you are heading off to a deployment destination, sign up for your free Active Duty Alert before you go. Also, consider applying a Security Freeze to your credit profile if you don’t plan on applying for credit any time soon. Not only do these precautionary tools protect your finances, they can give you a priceless peace of mind to know that you and your family are safe and secure.

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