TOP STORY >> Good habits boost fiscal fitness

By Airman 1st Class Grace Nichols

19th Airlift Wing Public Affairs

Just like preparing for a physical fitness test, there’s no shortcut to “fiscal fitness” and an excellent credit score. There are steps that Airmen can take today to improve credit scores and avoid future financial woes.

The Airman & Family Readiness Center at Little Rock Air Force Base, Arkansas, offers a Managing Credit Class, which covers the basics of building and maintaining a good credit score. Financial advisors can help get budgets on track to start prevent overuse of credit cards, thus increasing credit scores.

“Service members need to make sure they keep their credit in check because it could potentially affect their ability to get or maintain their security clearance,” said Peggy Bennett, A&FRC community readiness consultant. “We have seen members lose their security clearance due to bad credit. Your credit report and history not only effect your buying power, but they can also affect future employment and your insurance.”

Following these simple tips from the A&FRC can boost future credit health:

• Have and use credit cards responsibly, keeping low or no balances at the end of the billing cycle.

• Pay all bills on time and have installment loans for vehicles or mortgages

• Save for emergencies so you don’t have an unexpected bill on a credit card without the ability to pay it off.

• Don’t charge items to a card and wait to pay them off for long periods of time. An account that is in excess of 20 percent of the available credit limit is going to hurt scores.

• Create a workable budget, and build and maintain an emergency fund. 

• Keep debt to income ratio (non-mortgage) below 20 percent.

• Use credit cards for safety and convenience, but zero the card out at least once a month.

“The Air Force expects integrity, solid credibility and reliability from our Airmen,” said Master Sgt. Carlo Nino, 19th Aircraft Maintenance Squadron first sergeant. “It is particularly important to maintain personal financial affairs because it doesn’t just affect the Airmen, it definitely impacts the Air Force mission too.”

Bad credit scores affects a borrower’s interest rates as well as insurance rates for everything from renters insurance to health and life insurance. High balances on credit cards, late or missed payments, maxed out accounts and overdrafts on checking accounts are the main causes of poor credit.

“Usually the quickest fix for a bad credit score is to get it down to less than 10 percent of the available balance,” said Richard Tomaskovic, A&FRC community readiness consultant. “Setting up a bill payment calendar, making a budget and sticking to it is also important, but will take longer.”

Key factors for credit health are credit card payment history and amounts owed, according to Tomaskovic, who added that these contribute to 65 percent of a credit score. Other factors include length of credit history, types of credit used and new accounts.

For more information about building credit or to meet with a financial advisor, contact the A&FRC at 501-987-2667.