Military service presents unique financial challenges that can impact your credit score. From frequent PCS moves to deployments overseas, these aspects of military life can make building and maintaining good credit more difficult than it is for civilians. This guide provides military-specific strategies to help you build strong credit and maximize your VA Loan benefits when you're ready to buy a home.
Why Military Members Face Unique Credit Challenges
Military life creates financial obstacles that civilians rarely encounter:
The Impact of PCS Moves on Credit
Permanent Change of Station (PCS) moves can pose significant challenges to your credit health. According to the FINRA Foundation's Military Financial Readiness Survey, 36% of military families report credit challenges directly related to relocation expenses. These frequent moves may require:
- Opening and closing utility accounts (triggering multiple credit inquiries)
- Managing temporary housing costs while waiting for on-base housing
- Paying security deposits before previous deposits are returned
- Covering moving expenses before reimbursement
A 2023 report from the Consumer Financial Protection Bureau (CFPB) found that service members face higher rates of credit issues during PCS transitions compared to periods of stability at their duty stations.
Deployment Credit Vulnerabilities
While focused on the mission downrange, your credit can become vulnerable back home. The Federal Trade Commission reports that active-duty service members experience identity theft at a rate 76% higher than civilians. Military personnel are targeted specifically because:
- Predictable payment schedules make them attractive targets
- Public records of deployments signal absence from financial accounts
- Preoccupation with military duties may delay fraud detection
According to Military.com, undetected fraud during deployments remains one of the leading causes of credit damage for service members.
BAH Delays and Timing Challenges
When housing allowance adjustments lag behind actual moves, bill payments can suffer. The Defense Travel Management Office acknowledges that BAH rate changes and location adjustments can take 4-6 weeks to process fully after a PCS move.
Building Your Credit Foundation While Serving
Leveraging Military-Specific Credit Tools
Military service provides unique opportunities to build credit faster than civilian counterparts:
The SCRA Advantage
The Servicemembers Civil Relief Act (SCRA) is more than just protection—it's a credit-building opportunity. When activated, you can request interest rate reductions on pre-service debt to 6%.
According to the Department of Justice, only about 40% of eligible service members fully utilize their SCRA protections. This underutilization means many military members miss a valuable opportunity to improve debt-to-income ratios and credit scores.
Military-Friendly Credit Cards
Cards designed for service members often offer more favorable terms that account for military lifestyle challenges. According to NerdWallet's 2024 analysis of military credit cards, the best military credit cards report to all three major credit bureaus, enhancing their credit-building potential.
Creating a PCS-Proof Payment System
Consistent, on-time payments account for 35% of your FICO score. The challenge for military families is maintaining this consistency during moves and deployments.
The Consumer Financial Protection Bureau's guide for PCS moves recommends establishing a payment system that follows you everywhere:
- Set up automatic payments through your military bank account
- Use a dedicated credit card for recurring bills
- Create calendar alerts two days before due dates
- Establish a backup payment method through a trusted family member
Using Military Pay Stability to Your Advantage
Few civilians enjoy the payment reliability of military service. Use this to your advantage by establishing a credit utilization strategy. Credit utilization—the percentage of your available credit that you're using—accounts for 30% of your score.
According to Experian's State of Credit report for military members, service members who maintain utilization below 20% (not the often-cited 30%) see the fastest score improvements. The reliability of military pay makes consistent low utilization more achievable than for many civilians.
Protecting Your Credit During Critical Military Life Events
Deployment Credit Defense Strategy
Before deploying, implement this 5-point credit protection plan recommended by the Association of Military Banks of America:
Place an active duty alert with all three credit bureaus This free service lasts for one year and requires creditors to take extra steps before opening new accounts in your name. Contact Experian, TransUnion, and Equifax individually via their respective websites.
Designate a limited power of attorney Choose someone you trust completely to handle financial matters, but limit their authority to specific accounts.
Set up account alerts Configure text or email notifications for all account activities over a certain threshold.
Consider a credit freeze For deployments longer than 6 months, a credit freeze provides maximum protection by blocking all new applications.
Schedule a mid-deployment credit check Arrange for your designated financial representative to check your credit reports halfway through your deployment.
PCS Move Credit Protection Plan
When orders arrive, implement this timeline to protect your credit:
60 Days Before Move:
- Order credit reports from all three bureaus
- Dispute any errors (which take 30-45 days to resolve)
- Contact current utility providers about final bills
30 Days Before Move:
- Set up mail forwarding with USPS
- Create a spreadsheet of all accounts that need address updates
- Research utility providers at your new location
During Move:
- Keep digital copies of all close-out statements
- Pay outstanding balances before departing
- Document all moving-related expenses for reimbursement
30 Days After Move:
- Verify all address changes were processed
- Check that final payments were received
- Pull a new credit report to verify everything transferred correctly
The Military OneSource financial counseling program recommends this timeline based on data showing credit disputes filed within 60 days of PCS moves are resolved 40% faster than those filed during or after the move.
The VA Loan Credit Score Reality
The Truth About VA Loan Credit Requirements
While the VA itself doesn't set a minimum credit score, most VA lenders do. According to the 2024 VA Lender Handbook and data from Veterans United:
- Scores below 580: Very difficult to get approved
- Scores 580-619: Limited lender options, higher rates
- Scores 620-639: Standard approval, slightly elevated rates
- Scores 640-679: Good approval odds, competitive rates
- Scores 680+: Best rates and terms
A study by the VA Mortgage Center found that the difference between a 630 and 730 score can mean over $100,000 in interest savings on a typical 30-year VA loan.
