...loosing track of a couple of bills as a result of relocating, or having "paid collection" accounts from a few years ago.  Favorable changes in financial habits and lifestyle over a period of time can mitigate more recent financial irresponsibility.  Formerly delinquent debts (delinquent debts that were eventually fully satisfied) are given more or less weight depending on the applicant's more recent credit dealings.  The existence of current debt problems increases the significance of past debt problems.

Beyond Applicant's Control: Financial problems often arise due to situations beyond a person's control, such as medical debts, divorce, loss of income, victim of crime, bad investments, business downturn, and natural disasters.  In such situations if a person acts reasonably and responsibly (including bankruptcy, when necessary) to resolve their debts, the financial issue can be mitigated.  The debts do not have to be fully resolved at the time of adjudication, but there should be verifiable uninterrupted efforts toward this goal.  Being a victim of predatory lending practices, particularly involving subprime mortgages, appears to somewhat fall into the category of situations beyond an applicant's control.  Much will depend on individual circumstances.  Applicants who are lawyers, accounts, and people with experience in the financial services industry will have difficulty convincing anyone that they were victims.

Counseling/Good Faith Effort to Repay: Conscientious participation in credit counseling or a debt consolidation program can significantly mitigate financial concerns.  Consistent, systematic, good faith efforts to repay or otherwise resolve debts without formal counseling will have the same effect.  If it is obvious that an applicant is only taking such action because they know that it is required to obtain a security clearance, it will not convince an adjudicator that the problem is unlikely to recur after the clearance is granted.  Therefore, efforts to resolve financial problems should begin as soon as possible.  Obviously the earlier corrective action is taken, the more likely the problem can be fully mitigated.  In some instances actions, such as credit counseling, initiated only a few months prior to applying for a clearance can substantially mitigate security concerns.

Disputed Debts: When business records, including credit reports, indicate that an applicant owes money, the burden of proof shifts to the applicant to disprove the claim.  If an applicant has several sizeable credit accounts listed as "paid as agreed" and only one delinquent account, adjudicators are much more inclined to accept even minimal evidence from the applicant that the delinquent account information is erroneous.  Conversely, if an applicant disputes half of the accounts listed on their credit report, adjudicator will want to see convincing evidence to support the applicant's claim.  Efforts to dispute erroneous credit report entries immediately after learning of them will also help to substantiate the applicant's position.

William H. Henderson is a retire security investigator, author of Security Clearance Manual: How To Reduce The Time It Take To Get Your Government Clearance, and regular contributor to ClearanceJobsBlog.com.

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