By Jay Shareef and Chris Rhoads
A strong credit score is crucial for everyone, but it holds particular importance for veterans, especially when it comes to obtaining a VA loan. While the VA doesn’t set a specific credit score requirement, specific lenders may have their own thresholds that make or break a loan approval.
Establishing a credit history is vital for anyone who wishes to access credit and loans, and a good credit score opens up opportunities within your financial strategy that might otherwise be out of reach. Making wise credit decisions is the first step toward building a solid credit score. Let’s dive into some practical tips to help boost (and protect) your credit score.
Take Advantage of Free Credit Score Monitoring
Equifax, Experian, and TransUnion all offer active duty military and National Guard members free credit monitoring. This benefit allows you to keep on top of your credit score since it is a fluid, ever-changing ranking. When you see your credit score slipping, you can take immediate action to help raise it again. Or, if your score is in the range of good to excellent, you’ll know you’re making the right choices and handling your credit, debt, and loans in a responsible way.
Get Your Credit Reports Regularly
A good financial practice is to regularly get a copy of your own credit report. This report has an overall score plus detailed information about all your open and closed credit cards and loans and how timely you made payments. Receiving your credit report is the best way to monitor for any mistakes that may be present. When you see an error in your report, you can work to correct it. We suggest getting your own credit report on a regular basis, perhaps every quarter or at least every year. If you’re requesting your report online, make sure you’re using a safe and secure device and internet connection since you’ll be providing personal information such as your Social Security number and date of birth.
Take Steps to Improve Your Credit Score
Be ever on the lookout for ways to up your credit score. Once you start reviewing your report on a regular basis, you’ll notice times when your score drops a bit and times when it increases. As stated earlier, be sure to dispute any discovered errors. Errors may be present in the spelling of your name, your address, or your Social Security number.
Here are some ways to improve your credit score:
- Pay all your bills on time.
- Use only 30% of your available credit.
- Do not open any new accounts.
- Keep old accounts open even if you’re not actively using them.
- If you have debt from before you were on active duty, you can request an interest rate reduction to 6% under the Servicemembers Civil Relief Act.
- Go to your military branch Relief Society if you’re holding debts you can’t pay.
- Pay off any tax liens or judgments.
Attaining a high credit score is like a science. These strategies can actually work in your favor, so as you implement them, you should see your credit score improve over time.
Protect Your Credit
Protecting your credit score is just as important as improving a lower credit score. In this age of cyber theft and identity theft, taking measures to safeguard your identity and your credit history is paramount. You can set up an initial fraud alert on your credit history. This requires any creditors or businesses to verify your identity before opening an account in your name, issuing a new card, or increasing your credit limit. The cost is free and is active for one year. Similarly, you can put in place an active military duty alert on your credit whenever you are in active duty. The same benefits apply as with the initial fraud alert.
If you ever think you have been a victim of identity theft, you can place an actual credit freeze on your identity. This hold forbids the opening of new accounts and prevents access to your credit reports by anyone. This level of alert is also free and stays in place until you call the three credit reporting services and have it lifted.
We Can Support
As a veteran, your credit history serves as the storybook of your financial journey. A solid credit score not only unlocks doors to opportunities like homeownership, VA loans, apartment rentals, and credit card applications, but it also reflects your personal financial health, over which you have considerable control.
By following the steps laid out in this guide, you can feel confident your credit score remains in top shape. Remember, you don’t have to tackle financial decisions on your own. Whether you need assistance managing debt, crafting a budget, or mapping out your financial future, the WealthFlow Financial team is here to lend a hand. If you don’t already have an advisor helping you do that, reach out to us at (301) 798-5250 or schedule a phone call now.
About Jay
Jay Shareef is vice president, financial advisor, federal benefits consultant, and co-founder at WealthFlow Financial, based in Frederick, MD. As a U.S. Army veteran, Jay is passionate about helping federal employees create a bulletproof plan for retirement and navigate the often confusing and complicated federal benefits landscape. He spends his days educating and providing clients with unbiased insurance benefits and retirement strategies to help his clients create guaranteed income for life. As a problem-solver and trustworthy resource, Jay always puts his clients and their needs first so they can find financial peace of mind. To learn more about Jay, connect with him on LinkedIn.
About Chris
Chris Rhoads is a co-founder and vice president of WealthFlow Financial, based in Frederick, MD. As a registered investment advisor and independent financial professional, Chris is committed to helping his clients in retirement and he takes a holistic approach to financial planning that includes insurance and risk management, investments and wealth management, retirement income planning, and estate and tax planning. Chris has been married to his wife, Tia, since 2009 and they live in Frederick, MD, together with their two young daughters. In his free time, Chris enjoys traveling, watching sports, and being active in causes about which he cares passionately. To learn more about Chris, connect with him on LinkedIn.