How Military Service Can Impact Your Credit (And How to Own It)

A good friend of mine was ready to buy his first car after joining the military.  He did his research, found the perfect car, and was excited to call it his own—until the lender pulled his credit. His score wasn’t high enough to qualify for the best interest rate, meaning he had to consider higher monthly payments or a longer loan term to stay on budget. He was shocked. He figured his steady paycheck, and military service would give him a leg up. However, between frequent moves, unexpected expenses, and a few financial missteps, his credit had taken a hit.

My friend is not alone.  Military life throws plenty of financial curveballs, and if you’re not paying attention, your credit reputation can suffer. The good news is that you can take control of your credit before it causes problems.

Military Moves: A Potential Credit Obstacle

Every few years, you pack up your life and move. Exciting? Sometimes. Expensive? Definitely.

With security deposits, utility transfers, and travel costs—military moves come with surprise expenses that can leave you relying on credit cards if you’re not prepared. And here’s a sneaky credit issue: Moving frequently can cause billing errors and missed payments if your mail doesn’t catch up with you. That “past due” notice? You might not even see it until it’s already hurting your credit reputation.

What to do: Before a PCS, budget for moving expenses so you’re not caught off guard. Keep an emergency fund to cover out of pocket moving expenses and set up autopay for your bills. Update your address with creditors ASAP.

Deployments: Out of Sight, But Not Out of Mind Out

When you’re deployed, the last thing you want to worry about is whether your bills are getting paid. But missing just one payment can hurt your credit.

What to do: Automate everything. Set up recurring payments for your credit cards, loans, and utilities. Also, consider placing an active-duty alert on your credit report—it helps protect you from identity theft while you’re away.

Military Consumer Protections: The Servicemembers Civil Relief Act (SCRA) and Military Lending Act (MLA) Out

SCRA gives military members major financial benefits, including:

• A 6% interest rate cap on pre-service debt (credit cards, auto loans, even mortgages!).
• Protection from foreclosure and eviction under certain conditions.
• The ability to terminate leases and phone contracts without penalty if orders require it.

Sounds amazing, right? The catch: Lenders won’t apply these benefits automatically—you have to request them.

MLA provides many protections, including:

• 36% interest rate cap on most consumer loans
• Prohibits mandatory waivers of consumer protection laws, mandatory allotments, and prepayment penalties

What to do: Contact your lenders and ask for SCRA benefits and know your rights under MLA.

Military-Specific Financial Scams and Identity Theft Out

Scammers love targeting Service members, especially when you’re deployed or moving. If someone steals your identity and racks up debt in your name, it could be months before you even realize it.

What to do: Check your credit report regularly. You can get a free report from all three credit reporting agencies every week at AnnualCreditReport.com. Better yet, consider placing a security freeze on your credit when you’re not actively applying for new accounts. Credit monitoring is available for free for active-duty Service members, visit the three credit reporting agencies – Equifax, TransUnion, and Experian – to sign up.

The USAA Educational Foundation is a nonprofit, tax-exempt IRS 501(c)(3) and cannot endorse or promote any commercial supplier, product, or service. The content of this blog is intended for information purposes only and does not constitute legal, tax, or financial advice.