How to Protect Your Credit During Deployment
Your credit probably isn’t at the top of your mind when you’re getting ready for deployment. However, taking a few simple steps can help protect your credit now and in the future, giving you one less thing to worry about.
Table of contents
- Check and freeze your credit
- Know your rights under the SCRA
- Organize your finances
- Sort out your mail situation
- How to protect your credit during deployment FAQs
Check and freeze your credit
Checking your credit report before deployment lets you have a record of all your open accounts and their statuses.
If there’s any fraudulent activity while you’re deployed — say, somebody tries to open an account in your name — having a record of your pre-deployment report can help you catch it.
You can get a free copy of your credit report every week at AnnualCreditReport.com which won’t include your credit score. But you’re also entitled to one yearly report from each of the credit reporting bureaus (Experian, TransUnion, Equifax) and these will show your score.
Check all three reports for accuracy and any negative marks to your credit history, and keep them on file to reference when you come back.
Freeze your credit
To further ensure that you protect your credit, consider freezing it via an active duty alert which will prevent lenders from accessing your report. Once your credit is frozen, if someone were to apply for a new line of credit or loan under your name, they simply wouldn’t be approved due to the lender’s lack of access to your credit history.
Deployed members of the military can place a free active duty fraud alert that freezes their credit for one year (you can have it removed earlier if needed, or renew it once the initial year is up).
It also removes your name from prescreened credit card or insurance offers for two years. All you need to do is contact one of the three credit bureaus to request it (with proof of your identity), and they’ll send the request to the other two.
Active duty credit monitoring
In 2019, the Federal Trade Commission (FTC) finalized a rule that requires that the three credit bureaus must offer free credit monitoring to active duty military personnel.
This provision can help you catch identity theft and scams in their early stages, by sending alerts of any credit report changes within 24 hours.
To apply, you simply need to sign up with each of the three credit bureaus, with your contact info, proof of being on active duty and proof of identity.
Know your rights under the SCRA
The Servicemembers Civil Relief Act (SCRA) was enacted in 2003 to offer a series of protections to active duty members.
The broad base of rights provided by the SCRA can have a direct impact on your finances, from lowering your interest rates to protecting you from foreclosure and reposessions (both of which can remain on your credit report for seven years).
The main protections of the SCRA are:
- Reducing your interest rate to a maximum of 6% on any car, home, student loan, mortgage or credit card undertaken before becoming a service member
- Protections against default judgments in civil cases
- Protections against foreclosures and repossessions
- The ability to terminate residential or automobile leases penalty-free (this also applies to cable, cell phone and internet contracts)
The SCRA applies to active duty members of the Air Force, Army, Coast Guard, Marine Corps, and Navy, as well as members of the Reserve when on active duty, National Guard members mobilized under federal orders for at least 30 consecutive days, and active duty commissioned officers of the National Oceanic and Atmospheric Administration or the Public Health Service. SCRA protections can be exercised by anyone with a power of attorney for the service member, and some rights also apply to dependents.
Organize your finances
One key step to take once you receive your military deployment orders is to review and simplify your finances. Make a list of your creditors, service providers and allotments — like your bank, credit union or credit card company — and let them know you’ll be deployed.
Suspend or cancel some services
Pay off the balance on your bills, if possible, and see if you can request a coverage suspension from your car insurance company. (Of course, if no one else is using your car while you’re away.)
While this depends on the company and the state, dropping some coverage can represent significant savings, and minimize the possibility of falling behind on payments. You might also want to consider canceling any other services you may not use while deployed, such as streaming services or other subscriptions.
Take into account any additional pay
When you’re on active duty, you’ll receive additional pay benefits, but bear in mind that there might be a delay in receiving it. For example:
- Special and Incentive Pay: There are over 60 S&I pays authorized by law, used to compensate service members for hazardous or dangerous assignments or conditions, such as deployment to a combat zone. Determine which military pays are applicable to your situation to figure out the changes to your income.
- Family Separation Allowance: If your deployment means you’ll be away from dependents for more than 30 days, you may be eligible for a $250/month family separation allowance.
Consider a power of attorney
If the conditions of your deployment mean you won’t be able to take care of financial issues that may come up, getting a power of attorney for your spouse, or a trusted friend or relative can be a good idea.
These give your representative the legal authority to sign papers for you and take other actions on your behalf. They can be set for pre-established lengths of time or be limited to certain areas of your finances, such as paying bills or taxes.
It’s important to remember that you will still need to sign a power of attorney even if you’re legally married or in a domestic partnership. Legal assistance to set these up is available at military installations.
Sort out your mail situation
To minimize the risk of identity theft, opt out of junk mail by signing up for DMAchoice, a service from the Association of National Advertisers (ANA) that reduces the amount of promotional mail you get from companies or organizations you don’t have an existing business relationship with. DMAchoice has a $6 processing fee and you’ll remain registered for 10 years. (This is separate from the active duty fraud alert, though that service will automatically opt you out of credit card or insurance offers while activated).
Finally, make sure your current mail is being sent to an address where any personal or important information can be dealt with promptly.