A sampling of Defense Office of Hearing and Appeals (DOHA) security clearance hearings from 2007 showed that about 50 percent of clearance denials involved “Financial Considerations.” This was two times greater than the next most frequently listed issue for clearance denial.*
Guideline F: Financial Considerations is one of 13 criteria listed in the Adjudicative Guidelines For Determining Eligibility For Access To Classified Information. Excessive indebtedness increases the temptation to commit unethical or illegal acts in order to obtain funds to pay off the debts. Most Americans who betrayed their country did it for financial gain—about half were motivated by a real or perceived urgent need for money and about half by personal greed.
Aside from compulsive/addictive behavior, deceptive/illegal financial practices, and unexplained affluence, the remaining potentially disqualifying conditions detailed in Guideline F can be boiled down to one security concern—delinquent debt. High debt to income ratio and excessive indebtedness are listed as a potentially disqualifying condition, but this rarely comes into play absent any past or present delinquent debt or obvious signs of unexplained income. Low credit scores are not listed as a potential disqualifying condition, because factors unrelated to debt affect credit scores.
DELINQUENT DEBT
Delinquent debt is by far the most common financial concern. In adjudicating these cases the following factors are taken into consideration:
• Cause of debt
• Response to debt
• Amount of debt
Cause of debt is generally more important than the amount of debt, because it reveals more about a person’s reliability, trustworthiness, and judgment. Of people who seek credit counseling, roughly 50 percent are due to irresponsibility. If the debt was caused by irresponsibility (including reckless behavior) that is likely to continue, the problem is magnified. If the debt occurred due to situations beyond the applicant’s control and the applicant is handling the debt in a reasonable manner (including bankruptcy or debt consolidation), the significance of the problem is substantially reduced.
Response to debt is evaluated by the things people do (or don’t do) about delinquent debt. How people deal with debt is often a decisive consideration. Those who ignore their financial responsibilities may also ignore their responsibility to safeguard classified information. Classic indicators of irresponsibility and unethical behavior are:
• Changing addresses without notifying creditors
• Failure to take reasonable measures to pay or reduce debts
• Knowingly issuing bad checks
• Increased credit card use immediately before filing for bankruptcy
The words, “bankruptcy” and “credit counseling” do not appear anywhere in the Adjudicative Guidelines. This is because both bankruptcy and credit counseling can be considered positive efforts to get one’s finances under control. What is important is the underlying reason for the bankruptcy or credit counseling.
Amount of debt focuses primarily on the delinquent amount, but as previously mentioned total debt, if it appears excessive, may also be taken into consideration. Significant delinquent debt is a security concern. For total debt there is a rule of thumb used by credit counselors. If an individual’s minimum monthly payments for consumer credit (excluding credit cards that are paid in full at the end of each billing cycle and mortgages on primary homes) totals more than 20 percent of monthly take-home pay, there is a financial problem. This does not apply to unmarried military personnel who live in barracks and eat in mess halls and others who are similarly situated. According to Office of Personnel Management (OPM), Federal Investigative Notice No. 06-07, OPM does not automatically expand investigations for financial issues, unless:
• Credit report reflects current aggregate delinquent debt totaling $3,500 or
• Bankruptcy within the past 2 years or
• Bankruptcy within the past 3 to 5 years with evidence of current credit problems.
This does not mean that delinquent debt totaling less than $3,500 is not significant, but it does suggest that, absent any aggravating circumstances or other security issues, the government is not overly concerned about small amounts of delinquent debt. OPM considers bankruptcy only as a trigger for further inquiry.
* Guideline E: Personal Conduct was cited in about 45 percent of the cases, but was usually a issue involving falsification directly related to other adjudicative criteria.
William H. Henderson is a retired security investigator, author of Security Clearance Manual: How To Reduce The Time It Take To Get Your Government Clearance, and regular contributor to ClearanceJobs.com and ClearanceJobsBlog.com
I am also going through the process of getting a security clerance and I am worried I will be denied due to bad credit. I went through a pretty bad divorce and it ruined by credit and left me with charge offs / repo / and a foreclosure. I decided to go back to school to finish my degree then get a job which would help me to pay off the debt. I got the job and now I am afraid I will lose it because of my past. I have made arrangments with these creditors now that I have the money and have been trying to pay them off but there are so many of them I cant pay them all at once so I dont know what else to do. I have supporting documentation from these creditors that I am paying or have paid some of them off but I am not sure if this is good enough. I am ex military and I served my country and now I see all these people saying they have been denied a clearance due to financial probmels and it makes me worry. Thanks!
gm (Oklahoma City, Ok.)
on 10 Nov 2009 at 12:07 pm
I do not understand why a security clearance has anything to do with someones credit. I can understand if a person has a great job making very good money and has bad credit, because he is not using good judgment with living within his means. On the other hand, a person making barely minimum wage or a little over, could never have good credit, because he struggles to just make ends meet and usually does not. He may have gotten credit to buy a car or such and then has to rob Peter to pay Paul in order to keep it.
The whole thing is ludicrous, and the government is keeping the poor poor and the haves haves. I know someone who is a janitor at a government building, and has worked there for four years, and now a new contractor has the contract and he has to get a security clearance and has been denied until he submits a letter explaining himself on the denial. WRONG! The government sucks so bad with how they treat the little people. I am so ashamed of my government sometimes. I embrace socialism more and more.
The jobs that do not pay a living wage and the companies who offer them are at fault, not the poor person trying to find scraps to eat on the piddly money he is paid to do honest hard work. If a company cannot pay a true living wage, then why are they in business? The owner or others at the top do not go home at night wondering if their electricity was cut off during the day because they could not pay it until the end of the week, because of an emergency. The owners of these pathetic companies has enough money and then some. Shame on these people who care only for themselves. What happened to being our brothers keeper? Many people have difficulty of making a living through no fault of their own. Life sometimes is a game of chance and luck, and too many people say as long as I got mine, I do not care if you get yours. How sad. I hope when the end of time comes, those in that position will get what is coming to them, and the wealth they accumulated on earth will be all for not. Eternal damnation will not have been worth the justice they will endure in the end.
cwg316 (San Diego)
on 02 Nov 2009 at 3:46 pm
I have an existing TS/SCI and I had a foreclosure in 2008, found out by receiving 1099 in the mail from the bank. Notifed my employer at the time but they never submitted it to DONCAF. New job and they said the new finacial matters must be sent to DONCAf for adjudication prior to being read on. The reason for the foreclosure was the tenant stopped paying rent and wrecked the house, I could not afford it anymore, couldn't to a died in lue or short sale, lost it. I have since negotiated payback terms for the equity loan and the primary mortgage and Equity loan are the only 2 items on my credit report. Do I have anything to worry about? and approx how long does it take to have the item adjudicated? Thanks!
concerned (NC)
on 21 Oct 2009 at 7:44 pm
My husband is military, and has a security clearance with his job and absolutely CANNOT lose it! In 06 b4 we were married i went to school and didn't finish, thought financial aid would pay for the classes i took and come to find out they didn't. I went to the school in may 09 to pay the the last school fee of $100 never paid before leaving so i could get my transcripts to go back to school and gave me this # to call. come to find out F.A never covered it and i owe 10k, told them i wanted paperwork and would file BKR, they said i couldn't bc its considered a student loan even thou i never had a loan, nvr got any paperwork, then yesterday they call saying they nvr got the BK paperwork(was told i couldnt file BK on this) & Fri they will decided weather or not to take legal action and file suit against me, unless i pay 20% down right now and $700mo for next 12mos to resolve the debt in a year! 1st of all nobody has 10k to give someone in a year. Can my husband lose his security clearance or garnish his pay/taxes if they file a judgment against me even though this debt was incurred before we got married and in my madian name? any help would be greatly appreciated!
MYE (Maryland)
on 01 Oct 2009 at 11:37 am
I had excellent credit until, I started helping out my sister with her child, Fiancée lost his job and we became pregnant with twins. However, one of the babies died during my pregnancy and had to be surgical removed. Medical bills start piling up and I was using credit cards to pay them. I have been hired for a job and suppost to start soon, and have a secret clearance, that may or maybe expiring. I am looking to file bankruptcy. Will this prevent me from getting a clearance.
KL (Missouri)
on 08 Sep 2009 at 10:23 am
I am preparing to do evaluation at a Government Facility here in Missouri for a Government Job. I am very concerned about my Credit I have several Debts that I could not pay and about 7,000 in Student loans and 8500.00 that the IRS overpaid me in tax returns I am on hardship status with the IRS until I can a job will this hurt me in obtaining a Security Clearance Please give me some kind of an answer
Hou (Florida)
on 28 Aug 2009 at 1:17 pm
I lost my federal contract job in 2007 due to a salery realignment event. Though I have applied all over I have not been successful getting a job locally. I made all payments until January of this year - essentially I ran out of money. My car was repossessed in March and just early this month the bank sued me for the amount of the loan. I have about $22,000 in debt. I visited a lawyer and he suggested that I go Chapter 7. When it rains it pours as one of my applications has just been accepted for a GS job at my old series. My question is will I be able to keep my clearance, which expires this October considering that I may have to apply for Chapter 7 or should I just take the job and try to pay off the debt?
Bill (Silver Spring MD)
on 27 Aug 2009 at 3:50 pm
I recently filed for Chapter 7 BR and it went through in Feb 2009. The BR was caused by excessive debt incurred during marriage and I was labeled as responsible for the debt during the divorce. With Child Support payment and 50 percent of my retirement pension being paid to my ex-wife, I had to file BR. Currently; I have an active TS and am planning to take a new job requiring DHS suitability. With the above circumstance, does anyone see any problem with obtaining this suitability?
TS (Virginia)
on 17 Aug 2009 at 5:51 pm
I had stellar credit until the downturn and due to helping my mom out with her bills (regular and medical) and my company going bankrupt I had some credit cards get maxxed out and I am currently behind on a few of them. No chargeoffs but I am working with them to fix the problem and get back on track. I have a decent amount of money coming my way (from my 401k) so I can address the bills and get the past due amounts paid so I can be current again. Will I still be able to get a secret clearance? I am an honest person and try to pay all of my debts in an honest way. This economic downturn really has screwed up alot of people, including me. But I really want to get this job (is perfect for me, but I need a secret clearance)
corona91719 (Ca)
on 15 Aug 2009 at 2:20 am
Going through a security clearance right now and am concerned about my credit. Mainly late payments and a couple of accounts closed by the credit granter after payment in full. Will this disqualify me?
If I answered no to all the questions does that mean I am good to go or do they research further than the questions?
Kristin
on 14 Aug 2009 at 5:14 pm
Hi I been given a contigent offer to a position with a gov contracting company that requires a secret clearance. I'm a little concerned because of my fiances that I may not be able to obtain a clearance.
Please help!
1. I have currently have $70,378 in student loan debt. Keep in mind I just graduated with my undergraduate degree in 2007 and masters in 2009. I was able to obtain some finacial aid but very little so I mostly had to take out loans. Some of my loans I am currently paying while others are still deferred, everything has been paid ontime.
2. I have 11,782 still to owe on a car payment. I have been making every payment on time.
3. I also have $16,140 in credit card debt. My parents weren't able to help me with school and I was able to work a little, but not enough to still cover my textbooks, food, insurance, car payments, health insurance so I had to charge everything. The financial aide office told me they were unable to help with additional finances of room on board and those listed above. This is why the debt is so high.
I have been making every payment on time.
4. There was once instance in 2006 that I was 180 days late on a credit card payment. The credit card was a charge off and eventually an aggreement was reached with the collection agency and I paid the full amount due by 2007. The amount was under 2,000.
I have been working as an intern since I graduated college and throughout my masters. This doesn't allow me to have benefits so I've been paying out of my pocket for benefits, loans, car payments, insurance and doctor visits. I still have been making my credit card and loan payments but they are close to the maxing out point since my income doesn't allow for much more payment.
I am not going to risk national security, I just would like to be able to pay off my debts, I hate having them but right now I can only make minimum payments or a little over minimum payments.
I am concerned all of this will hurt my chances of obtaining a clearance.
In addition, I don't have any problems with the law, drugs, alcohol, or foreign issues. My only concern is the financial problem.
Does anyone think I will have any problems?
nece
on 04 Aug 2009 at 5:59 am
I'm not a bad person. I just got offered a federal position and I accepted. I need to obtain a secret clearance. I have a problem about my debts. I did not pay my debts for a long time. However I am trying to get my debts resolve through credit counseling. Will credit counseling help me with obtaining a secret clearance?
tj (nc)
on 28 Jul 2009 at 1:32 pm
just got offered emplyment with contractor who works on usps contract. i have been out of work for 6 months. a tax lein for 5700 was just placed on credit report. will this block the usps clearance. i need the job to pay the debt off. i have informed them of debt. all other credit is great
Reggie (Warner Robins GA)
on 14 Jul 2009 at 10:28 pm
I got divorced and took upon the majority of the things we owed. She recieved half of military retirement and portion of my employement. Causing me to go into considerable debt. I had a vehicle repossed, house forelclosed, and several other major financial issues. I file Chapter 13 and recently had it dismissed, because I have been able to get back on my feet. I recently received a govt job offer but need security clearance. What are my chances of receinving one.
Bill L. (Annapolis, MD)
on 14 Jul 2009 at 1:03 pm
11B (Oregon),
There is hope, but you need to act now. The problem is you admit that you have not made payments in several years. The adjudicative guidelines state that "inability or unwillingness to satisfy debts" is a security concern. First, obtain a credit report from each of the 3 major credit bureaus to see exactly what shows on them. Sometimes, these debts are sold to other creditors and you need to know exactly who you owe money to. Contact the creditor and attempt to set up a payment plan and start paying. Some creditors will negotiate a payoff lower than is actually owed. By the time you are interviewed, you should have a record of making payments in accordance with the agreement and that helps mitigate the situation. Good luck.
John (california)
on 10 Jul 2009 at 12:43 am
Can anyone tell me if a misdemeanor arrest (which did not result in any conviction) within the past 7 years would prevent being granted a clearance, if, lets say, it was not disclosed?
Also, what if you were forced to stop making payments on a house because of a job loss, but all other debt obligations were paid on time for at least 7 years?
11B (Oregon)
on 08 Jul 2009 at 3:02 am
I was recently hired for a contractor job in the middle east. Even though I told the company I had outstanding debt. I will need to acquire "secret" level clearance. They have not ran my clearance yet. However, I am $40,000 in joint debt with my wife who I am separated with. The unpaid joint debt is is several years old with no payments on it for years. I acquired most of it after separating from the Army (completing my contract with an honorable discharge) and overseas deployment and my wife losing her job.
It would appear from your article I have absolutely no way acquiring a secret clearance? or is there hope?
William Henderson (Pacific Grove, CA)
on 04 Jul 2009 at 4:36 pm
Scott:
There are very few security/suitability issues that will absolutely prevent a person from getting a federal security clearance and yours is not one of them. Almost all past financial problems can be successfully mitigated if a person has acted reasonably and responsibly in meeting their financial obligations for the past few years. The whole purpose of the security clearance process is to try to predict future conduct based on past and current conduct. When a person has acted honestly and responsibly for a few years, it is much more indicative of their future conduct than something that happened further back in time. The challenge for most people is effectively conveying to an adjudicator (through their application form and sometime a security interview) what has changed in their life that shows they will not get into the same unfavorable situation in the future.
scott (california)
on 23 Jun 2009 at 1:45 pm
I have a question on this item with clearances. Over 10 years ago, I accidentally defaulted on paying my student loans and taxes. I was unaware since I was overseas and mail was delivered late. When I came back to the states, I made good faith effort to repay these debts which I did in full. Then I had bad car accident several years back and could not pay medical and credit card bills.
I declared chapter 7 bankruptcy 3.5 years ago. The BK was discharged successfully over 2 years ago. I rebuilt my credit rating with secured credit cards. I have no debt. For past 3 years, I have paid all of my bills on time. I file and pay all taxes for past 3 years and use a good CPA to ensure tax compliance.
Can I still obtain a secret clearance?
AJ (Texas)
on 01 May 2009 at 12:46 am
I have a lot of debit because i misused my credit cards but I have never been late on the monthly payments and I make payments to creditor every month. So if someone got his security clearance denied can he fix it or that's the end of his carrier. Thank you.
JON G. (FLORIDA)
on 31 Dec 2008 at 6:36 pm
my credit was almost perfect in june 2008 august i waslaid off work. and the economy in florida craped out now i have 2 credit cards im in default on. ihad to borrow almost all my 401k ,so i dont loose my house. now i have the opertunity to work in kuwait,or iraq.will these debts keep me from getting a security clearance? i already had to get a tsa security for my hazmat licenses,i passed that .what do i have to do now?? thanks jon
RT (New Port Richey, Fl)
on 13 Nov 2008 at 1:18 pm
I am in the middle of getting my security clearance restored so I can work at a Government contractors position. How long should it take for that clearance check to be done, if they can tell I had a TS clearance before?
Rick (florida)
on 12 Nov 2008 at 2:15 pm
I know this is unfair to the hard working people...like right now there is very few Americans with good credit...and do to the market and the economy alot of people are losing their homes cause of poor management of the goverment of this crazy bankers and lenders but now what ever we all loose...and yes there is more criminals with good credit out there who just do crazy things to keep their finances in order while the hard working american just struggles and fights to stay up....while the criminals get richer and the white collar people do what ever to take our money...thats why we are the way we are...money solves everything..but hard work dont..
ME (Miami)
on 13 Sep 2008 at 1:19 am
Everyone goes through bad economic times, while I was deployed I was making decent money, I had almost 0 expenses since the Army paid for everything I needed, I enter the civilian world and its half the pay and double the expenses, so now I cant get that good job. They should put people qualified for a job on probation status for 2 years and make you pay atleast 80% of your bad debt, atleast give you a chance. Just because you have a mountain of bills you cant pay does not make you a bad person. I served my country and served in 2 combat zones but it doesnt mean anything because my credit is bad, total nonsense..
Anonymous
on 28 Jul 2008 at 3:25 pm
sad to say, all to often it the big guys that ruin it for the ones trying to keep credit. with the current and past situation in the world, 911 as well as cut backs, loss of work has done the economy bad and with the lose of jobs and paychecks at a standstill trying to live is bad enough. what are the stats on number with good credit or decent credit? more criminals with good credit are in the work
DeBorah K Beckett (Oklahoma)
on 11 Jun 2008 at 9:07 am
I have medical debit for lack of insurance. My current job does not pay enough for me to get out of debit. I need a better salaried job, how can I get one if my credit score is bad?
JD (Charleston South Carolina)
on 29 Jan 2008 at 1:18 pm
With that being true its going to really put the people who have bad credit due to thier parents using their SSN in bad spot. I have a Secert SC and been working on my credit for the longest and its still not getting better. So if I lose my job that requires my SC it would take forever to pay back the debt I have then if I had the job
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