Are You A Service Member In Debt With Bad Credit? A Legitimate Way to Repair Your Credit Score

As a young Staff Sergeant back in 2002, I found myself in an incredibly awkward position.

It began harmlessly enough.

My foolish attempt at living above my means began to produce a lot of heartache and misery.

It started small and then snowballed into an extreme amount of debt. Over time, I began to live paycheck to paycheck.

In retrospect, I can clearly see the mistakes! I wonder what motivated me to get into this problem in the first place. It started the first time tried to get a cash advance. At the time it sounded quite simple, walk in broke, walk out with enough cash to party over the weekend.

How much trouble could that cause – a simple $200 loan? Before I knew what was happening, I was hooked, relying on payday loans to pay off the one I received during the last pay period.

Things Get Worse

Eventually, I failed to make a payment and being full of pride and unsure how to truly deal with the problem I choose to ignore it. My solution was to get a loan from Military Loans, or maybe it was Pioneer Loans.  They make it sound so easy, so I accepted a 3k loan with a 30% interest.

Next, I needed furniture, and instead of saving to make the big purchase I went the rent-a-center route. I furnished my entire apartment for only $400 per month. 

Lastly, I needed a new set of wheels, so I went to the corner lot that loves stealing money from unsuspecting Joes, and drove away with a truck with 90,000 miles on it that only cost me $510 per month.

I should have known something was wrong when the salesman asked me what’s the maximum that I could afford to pay per month….

Military Service Members and Bad Credit

There is no life like it. And that is true in so many ways. However, here is something that you might not know. I didn’t know it. Many members of the Armed Forces have bad credit. You might be surprised to hear this but considering my past, I’m not.

Many people think that being in the military provides you with a particular kind of financial protection. If they only knew that men and women in the military suffer from economic pressures and are preyed upon by big business.

If you happen to be a Service Member and you have a great deal of debt, rest assured you are not alone.

The consensus that we are paid more comes from reports such as the Congressional Budget Office’s Analysis of Federal Civilian and Military Compensation. This report was released in January of 2011 and set off a lot of talk about whether it is true that service members earn more than civilians.

The gist of the comments is along these lines from

“In fact, the final section of the report lists the factors which make comparing the two compensation systems difficult. Not the least of which are what the report refers to as the “intangibles.” These intangibles include frequent relocations, deployments, greater responsibility at earlier career points, and hazardous working conditions, not to mention the unlimited work hours (24/7 on call).”

Why Are You So Broke?

Are you like me and living outside of your means? Or is the availability of (bad) credit options making it all too easy to make poor decisions?

The clue to why so many of us have financial problems lies in the quote above. There is simply more pressure on the men and women in the military than there is in the civilian sector.

You can’t just go out and get a part-time job to bridge the financial gap because you are on call 24/7, let alone having to ask your command for the opportunity to moonlight, and have to explain your financial issues.

Because of the frequent moves, it is also often difficult for your spouse to build a career.

Peter Bielagus is a financial advisor who highlights seven financial mistakes that many service members that ruin their credit. You can read more about it here.

These mistakes are:

  1. Hiding from their credit report (you can check for free (
  2. Hiding from creditors and collection agents.
  3. Thinking that some debts never make it to your credit report.
  4. Thinking that a credit repair firm will fix it for you.
  5. Failing to use the free help on base.
  6. Not taking simple steps to protect themselves from identity theft.
  7. Not knowing your significant other’s credit history.

How Can You Get Help?

Number 5 above is crucial for you to think about if you are feeling any kind of crunch. This financial help on base is completely free. The catch is, and you can see this in some of the other mistakes military personnel make financially, you want to avoid dealing with the basic issue of your bad credit. It is uncomfortable.

Many people prefer to go to a private firm, even if it costs $300 an hour, rather than let the military know that they have credit problems. I’m sure you know the types; Lexington Law, and others of their ilk.

But, think about it, the on base legal assistance office deals with financial problems all the time. They are not there to judge you. They know that your military life is pressurized and will do what they can to solve your problems for you. It’s confidential, available, and knowledgeable.

Who Can Help You Out of This Mess?

You can help yourself by getting help. Being in the military does not make you exempt from being diligent about taking care of your money. An article originally in the August 1997 Navy “All Hands” Magazine makes it clear that serious debt issues can harm your career.

This article is a good guide to the steps you can take. One of the best pieces of advice in it is to get to know the Fair Debt Collection Practices Act.

Seek assistance right in your own backyard – on base.

Aside from providing free legal advice, the legal assistance services can help with debt consolidation loan information, credit counseling, and debt management that you need.

This resource should be your first stop at the first sign of problems with your credit cards – or any other financial problem. It is one of the benefits of being in the army, air force, or navy. You qualify for all the help you need.

As a side note, if you search online you will be inundated with information on military loans and credit cards that are not really armed forces related. These offers simply target military personnel and sometimes more credit just makes the problem worse.

The Army Emergency Relief has a slogan – Helping the Army Take Care of Its Own Since 1942. And it does take care of its own. AER is a private nonprofit organization that was incorporated in 1942 by the Secretary of War and the Army Chief of Staff. Its mission is to help soldiers and their dependents.

AER won’t help you pay your credit card bills, consolidate debt, or cover bad checks. Their funding is not for vacations, legal expenses, buying or repairing houses, or buying or leasing vehicles. However, AER can help with emergencies such as food, rent or utilities or emergency transportation and vehicle repair.

Other special circumstances include funeral expenses and medical and dental expenses. AER also offers undergraduate scholarships, based primarily on financial need, to children of soldiers.

The Air Force Aid Society is the official charity of the United States Air Force. It was also established in 1942 as a private, non-profit organization. It provides worldwide emergency assistance. It offers interest-free loans for up to $750.

Then, there is the Soldiers’ and Sailors’ Civil Relief Act of 1940. It is well worth getting to know this Act.

Among the benefits, it can offer you are reduced interest rate on your mortgage payments and credit card debt. If your rent is $1,200 or less, it can protect you from being evicted. The Act can also delay civil court actions, such as bankruptcy, foreclosure or divorce proceedings.

Who Qualifies?

If you are a member of the Armed Forces on active duty, you are eligible for credit assistance. If you are a member of a reserve component, a reservist released from active duty (after serving at least 30 days), retired from any branch of the service, or if you are a legal dependent of any qualified personnel, you are qualified for this help. In some cases, the widow(er)s of service members are also eligible.

Steps to Take

There are two steps to take you out of the misery of debt and credit issues.

1. Accept that the problem is bigger than you can handle.

2. Check your on base Legal Assistance Services for help.

Ultimately, realize you are not alone. Anyone and everyone can hit a credit obstacle. It does not make you an object of shame and you need to overcome your negative feelings. Forgive yourself and step up to the task at hand. Make the constant pressure from debt a thing of the past.

Curtez Riggs is a Retired Army Soldier, Entrepreneur, and friend to at least two important people. He is also the founder of the Military Influencer Conference℠, an exciting, dynamic event that brings together hundreds of spouses, community leaders, entrepreneurs, and influencers united by a passion for the military. You can find him online at: Twitter | LinkedIn | Facebook

  1. Another society worth mentioning here is the Navy Marine Corps Relief Society (, founded in 1904 with proceeds from the 1903 Army-Navy football game by officers, dependents, and concerned citizens. The Society offers similar services to marines and sailors, and will function as a liaison for retired soldiers and airmen if there is not an AER or AFAS branch nearby. All active-duty servicemembers and retirees would be well-advised to seek out assistance from these organizations before visiting a payday lender or other lender with exorbitant interest rates.

  2. After military retirement in 2008 I look a option of getting a teaching certificate in Pa. and try out being a HS history/economics teacher for a trial run. See if I wanted that for a bridge career. Moved on after about 2 years to something else, but still sub from time to time. The point is that in all of my classes interacting with a wide variety of 14-18 year olds, the level of basic, basic economic or financial management skills is close to zero. Basic skills such as check book balancing, the value of money and time, compound interests, credit score management was abysmal, even for graduates. So it is really no surprise that for the college crowd it is very easy to see how one could rack up 6 figure debt levels at the undergraduate level, and for the military cohort how they can be such easy prey and targets for the rent to own, used car, payday loan industry that surround many bases.

    I do think this fact was lost on those who designed the new hybrid retirement plan. In the military community the onus of responsibility will always rest with the service member to make informed financial decisions. But the Command chain must also realize that financial readiness is military readiness. And give all the tools or training needed to avoid the pain and problems financial mismanagement brings.

    • I hear you on young adults, Peter, yet I think that the educational efforts for the new retirement system (and military financial tools in general) are the best they’ve ever been.

      The real challenge is getting people to pay attention to the resources. I haven’t figured that one out yet.

  3. Is there a recommended bank or lending institution to get a consolidation loan?

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