How to Build Credit as Military Spouse

For military personnel, a steady paycheck can make it easier to build credit. For military spouses, building credit can be a bit more challenging. Frequent relocation makes keeping a long-term job difficult, so it’s not unusual for military spouses to have trouble qualifying for credit cards and loans.

Fortunately, there are many tools that can help. Learn how to build credit as military spouses using these tools and tips.

How to build credit as military spouses

If you’re married to a servicemember and are trying to work on your own credit, these tips may make it easier.

Request SCRA benefits

The Servicemembers Civil Relief Act (SCRA) offers several legal and financial protections to active-duty military members and their spouses. 

For those who want to know how to build credit as military spouses, there’s one SCRA benefit that stands out: Mortgages and consumer debts incurred prior to service may not exceed an interest rate of 6%. This applies to your spouse’s debts and to joint obligations, although some lenders may opt to extend the benefit to your individual debts.

Notably, these SCRA benefits aren’t automatically applied. You’ll have to get in touch with your lender and submit some documents.

Why does this matter for credit? A low credit utilization rate (using only a small percentage of the credit available to you) can significantly improve your credit score, and when interest rates are capped at 6%, your debts accumulate interest much more slowly. That makes it easier to pay them off.

Open a secured credit card

Making regular payments on a credit card is a great way to build your score. If you already have one or more credit cards in your name alone, you should pay down any outstanding balances and avoid accumulating more debt. This will lower your credit utilization rate.

If you don’t have a traditional credit card and can’t qualify for one, try applying for a secured credit card. 

Secured credit cards are designed specifically for people with limited credit history or no credit history at all. Most have relatively low limits, and you must give the lender a refundable deposit in the amount of the credit line. You make purchases and pay them off, and the card issuer reports your payments to credit bureaus.

Your payment history is the most important factor when determining your credit score. If you get a secured credit card and make all payments as agreed, your score should increase.

Try a credit-builder app

If you have to move frequently, establishing a relationship with a local bank can be tough. Credit-builder apps set you up with useful tools for improving your credit, and you don’t even have to leave your house to get started.

Kikoff is one of those credit-builder tools. Our basic plan helps you establish a positive credit history by paying off interest-free purchases over time. We may also be able to set you up with rent reporting, secured credit cards, credit-builder loans, and other tools to help you start your credit journey off right.

Become an authorized user on your spouse’s card

It’s a good idea to have one or more credit cards in your own name. It can also be helpful to share a card with your spouse, especially if they have good credit. 

Ask your spouse to add you as an authorized user to any credit cards that you use for household expenses. The payments made on the account will appear on your credit report. As long as you don’t miss payments or accumulate a large balance, this can be very helpful for your credit score.

Monitor your credit reports

Members of the military are vulnerable to identity theft. When you have to move and update your personal information frequently, identity thieves have more opportunities to steal it. 

You and your spouse should both monitor your reports. All three credit bureaus offer free credit monitoring for active-duty military members.

How credit works for military spouses in the U.S.

Many people believe that your job title and your income matter when calculating credit scores, but that’s not true. Being a servicemember doesn’t impact your credit score, and neither does being a military spouse. 

When determining your credit score, the credit bureaus use these five weighted factors:

• Payment History: 35%
• Credit Utilization: 30%
• Length of Credit History: 15%
• Credit Mix: 10%
• Amount of New Credit: 10%

However, unless you’re able to work remotely, it can be difficult to maintain a steady paycheck. While you may be able to qualify for loans with your spouse, building an independent credit history is important, too.

Common mistakes to avoid

Those wondering how to build credit as military spouses should remember to avoid these common mistakes:

• Not putting an active duty alert on your credit report while your spouse is deployed
• Not taking advantage of SCRA and other military-specific benefits
• Overusing credit cards to cover expenses
• Closing old accounts unnecessarily
• Putting in multiple applications for new credit at once
• Not monitoring your credit report

When you’re very intentional about managing your money and building your credit, you’ll be more likely to achieve your credit goals sooner.

Conclusion

For those wondering how to build credit as military spouses, Kikoff is here to help. We make it easy to build credit right from your phone, and we don’t run a hard credit check before approving you.

If you have questions or you’re ready to get started, contact us or open your account today!