January 22, 2015

When it comes to finances, there are two types of veterans: those with good credit, and those with bad credit. This can depend on many factors. If you were young, single, and living in the barracks and you have bad credit, then the “young and dumb” cliché comes to mind. However, there are many folks who join the military to use the steady paycheck and free schooling to help them pay off their debts. Either way, if you have been in the military, you are an adult now, which means that your credit is important to you.

One of the many benefits of having served our country and being retired or honorably discharged is the amazing amount of financial help we are offered. Of course we have the GI Bill, but there are also grants and scholarships that help with schooling. There are special credit card rates from military-centric banks offered to us. The VA even offers great programs for debt management. Still, military and veterans have special circumstances that might make things like regular mortgage payments a real struggle. It has been researched and proven that the chances of current and former military who use credit cards is using them to pay off debt is higher than the same chances of a civilian doing so. This is mostly due to the 30% unemployment rate of veterans. Also, cut-backs within the government are leaving many veterans “high and dry”.

As shown by a popular survey for veterans, only 26% of veterans are content with their current financial state. Well, there is no better time than now to start changing your current financial state. While in the military, many folks will have an entrusted individual handle their bill payments, especially during a deployment. It is easy to stay in this habit after deployment, and even after being discharged from the military. The first, and most important, thing you can do to take a step in the right financial direction is taking control of your finances. Learning how to handle them yourself is the best thing you can do for your finances. Make a budget, and stick to it!

If you are not happy with you current financial situation, you probably have some negative accounts on your credit report. This is a good place to start with your credit improvement. If your knowledge and understanding of financial credit is lacking, then a credit repair agency may be the direction for you. Seek out a company with experience that can be demonstrated online with reviews, testimonials and an active Yelp page. As with any financial service, be sure to do sufficient research.

There are many things you can do to build your credit on your own as well. Paying bills on time is, obviously, the best place to start. Then, a secured credit card could be a good move for you. Be sure the secured credit card that your bank provides is linked to major credit reporting agencies. Regular credit cards work as well. However, they only work if you can refrain from “maxing” them out, and you can pay your regular payments on time. The lower you can keep the amount on a credit card, the better. For example, if you can put $200 on your card and pay $100 per month, you only have to make two payments; this makes missing a payment less likely. Conversely, if you put $800 on the same card, your chance of missing, or being late, once or twice in eight months is significantly higher.

You have one tool, though, that can help you build your credit better than anything else can; your budget. Building a budget plan and sticking to it is the single, most effective way to build your credit. Always make sure you leave room in your budget for emergencies. Running out of toilet paper is no fun, especially when you don’t have money for more! Only once you can pay your bills comfortably, have an emergency fund, and have money left over each month, should you try to use a credit card as a means of building your credit.

Do your research, though, and find all the awesome tools out there for veterans. The VA can be a significant source of help, but you have to figure out how they can help you, because they won’t figure it out for you. Also, school grants and things can be used to pay for extra out-of-pocket school expenses. Getting one, or more, could put several hundred dollars back in your budget, especially considering the price of textbooks. Remember, don’t be ashamed to ask for help with a financial problem. Asking for help is the only way someone learns to do it themselves.

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