Checking credit reports for inaccuracies should be a top priority for service members returning from active duty

Today, many military members are coming off active duty and looking to begin their civilian livesĀ as normally and healthily as possible, and one of the biggest concerns that these people may face when making that transition is ensuring that their finances are as strongĀ as they can be.

One of the first things that servicemembers who are returning from active duty might want to do is make sure their credit is up to snuff, and they can do so by ordering copies of their credit reports. This will help them to get a quick overview of all the accounts being listed in their names and give them an idea of whether they need to do any work to rebuild credit that might have taken a bit of a hit while they were overseas.

What advantage does this give?

The reason it’s wise for servicemembers to check their credit reports is that these documents essentially serve as a quick and easy way to assess all accounts listed in their names at once. It lists every account outstanding, features data about payment history, and even the amount remaining on these balances, in a format that’s easy to read and understand even to someone with little background dealing with these accounts.

This can therefore give any servicemember a good idea of the areas they’ll need to work on when it comes to credit repair. A common problem they may face is that during their time overseas, they may have seen loved ones struggle a bit financially, and that can have a negative impact on any accounts they might hold jointly. For instance, if a military member has a credit card account that also lists his or her spouse as a co-signer, any mistakes the other person might have made will have had an equal effect on his or her credit standing.

Therefore, any overspending on the account that led to higher than normal debt totals, or even a single missed deadline, might have had a significant negative impact on that servicemember’s standing even if they had nothing to do with it, but a credit report will spell out all that information in clear language.

That will in turn allow them to start the work of repairing credit overall. The first place it may be wise to start is to make up for any missed payments in the recent past. This factor accounts for 35 percent of a person’s total credit rating, the single greatest factor in determining that standing, and therefore is of the utmost importance to put right. Unfortunately, there is no way to make up for missed deadlines in the past, but borrowers can lessen the impact this has on their credit ratings by making several months or more of payments on time and in full, into all accounts they control. This helps to show lenders that such a mistake was a one-time incident which is unlikely to be repeated again in the future.

Another issue servicemembers might face that can have a serious drag on their credit scores is if there is too much debt being carried on the credit card accounts listed in their names. This factor, known as “credit utilization ratio,” makes up another 30 percent of one’s score, and starts to be diminished when a borrower carries more than 30 percent of their total allowable credit limits at any one time. For this reason, those whose debt exceeds that total might want to start making more comprehensive efforts to pay larger amounts into those balances every month until the balance is back under control.

These two factors alone can significantly improve a military member’s credit standing and potentially give them access to more affordable interest rates, lower fees, and a broader range of available accounts, allowing them to save more on their borrowing efforts going forward as they begin their new civilian life.

Maintaining healthy habits

Of course, once most of the heavy lifting is done where credit repair is concerned, that doesn’t mean the job of maintaining healthy credit is over. Even after applying all the good habits learned during the repair process to everyday life, servicemembers might also benefit from taking the time to routinely check up on their standings just to make sure everything is as it should be.

One way in which they may be able to do this is by regularly ordering copies of their credit reports and checking them over closely for any unfair markings that may be having negative impacts on their overall credit scores. Fortunately, it can be helpful to work with a credit repair company if any of these issues are discovered, and that can help to potentially put them right, and return borrowers to where they otherwise deserve to be.

Posted in Credit Report
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