What to Know About Security Clearances and Your Money

in Plan by Lacey Langford, AFC®

Updated: March 23, 2021

In the military, we all know your finances must meet a higher standard. Your money is held to a different standard because most service members must hold a security clearance to perform their job. Without clearance, you won’t be able to do your job.

Your finances can have an impact on your ability to obtain and keep security clearances. Financial considerations are one of the guidelines service members are evaluated on when applying for security clearances. Poor financial management can lead to being denied a clearance or having your clearance revoked.

Financial behaviors are at the heart of issues getting or keeping a security clearance. The government wants to know if you will be able to meet your financial obligations. If not, you could be a security risk and, in those cases, won’t be eligible for security clearances. Here’s what you should do and know that will help protect your security clearance now and in the future.

What are the Levels of Military Security Clearances?

A security clearance is a designation giving a person access to classified information and materials. The majority of service members are required by the Department of Defense (DoD) to have a clearance to perform your duties. The three main types of clearances are Confidential, Secret, and Top Secret. The requirements and the levels of investigation go up as the level of clearance increases.


A Confidential clearance is having access to information that may cause damage to national security if in the wrong hands. Investigations for confidential clearances must renew every 15 years.


A Secret clearance is having access to information that may cause serious damage to national security if in the wrong hands. Investigations for confidential clearances must renew every ten years.

Top Secret

A Top Secret clearance is having access to information that may cause exceptionally grave damage to national security if in the wrong hands. Investigations for confidential clearances must renew every five years.


How to Get a Security Clearance in the Military

To get a security clearance, you must go through the adjudicative process. The process is a way to assess if you’re an acceptable security risk for the government. It begins when you fill out form SF-86. It’s the Questionnaire For National Security Positions.

Example of an SF-86

During the process, you’ll be required to give the adjudicative agency detailed information on your current and past residences, friends, and family in the area and self-identify any financial problems. Personal finance questions are under section 26: Financial Record. For example, if you’re going through a bankruptcy, you would need to make that known on the form. Honesty is the best policy in the adjudicative process.

After gathering information, the adjudicative agency reviews all of your information to see if you meet the Adjudicative Guidelines. Then they’ll determine if you’ll receive a clearance. During the evaluation, if there’s any doubt about a person’s ability to protect classified information, you’ll be denied a clearance. The adjudicative agency will always take the side of national security.

Always keep a copy of your SF-86. If you’ve ever filled out the 130+ page form, you know what I’m talking about. It’s a book of your life history, and you don’t want to have to start from the beginning every time. I’ve been there myself, and with my husband hunting down old numbers and addresses at the million places we’ve lived. It’s time-consuming and frustrating, so it’s just easier if you have the old information when it comes time to update your clearance paperwork.


Financial Considerations for a Military Clearance

Your finances are a factor for a security clearance because it’s one of the 13 guidelines in the adjudicative process. Guideline F is “Financial Considerations,” and it outlines the concerns and conditions that could result in being denied a security clearance.


The concern is that a service member’s financial situation could impact their ability to meet their financial obligations, which would make them untrustworthy and unable to protect classified materials and information.

If you have a large amount of debt or debt in collections, the investigating agency looks at this as not paying your financial obligations. It can also be seen as having a pattern of living outside your means, which is a cause for concern.


Security Clearance Disqualifiers

The decision to award or deny a security clearance is made case by case. During adjudication, they’re looking at “the whole person” during an evaluation. So there isn’t a certain amount of debt or collections. It just depends on your long-term financial behavior and your honesty about your financial situation.

However, the adjudicative guidelines do lay out some examples that would be cause for concern.

More on money management: Budgeting & Money Management Basics


When a Clearance is Denied or Revoked

When your clearance is denied or revoked, you’ll get a Letter of Intent (LOI) and the Statement of Reasons (SOR). The documents explain the problem exactly, but more importantly, they tell how to solve the problem.

Letter of Intent

The LOI notifies you that your clearance may be revoked or denied. Due to a discovery in the adjudicative process. To maintain your level of clearance, you will need to respond to the LOI.

Statement of Reason

The SOR outlines what was found during the process. It’s a list of financial issues the adjudicative authority wants you to resolve before they approve your security clearance. In most circumstances, the list will be from negative information on your credit report.


How to Appeal a Clearance When Denied or Revoked

If your clearance is revoked or denied, you can appeal the decision. The LOI will have attached instructions on how to respond. In most cases, you’ll have 10-15 days to respond once you receive the LOI. Appealing the decision means you have to show how you’re changing your financial behavior and meeting your obligations.

The easiest place to start is with the outline in your SOR. It’s the list of the investigation discoveries. To appeal, you have to “mitigate” each finding from the SOR. They want you to explain what happened and show how you’re fixing it. It’s not just saying it. You must provide documentation of how you’re resolving the problems.

For example, if your SOR states you’re six months behind on your car payments. You need to explain why you haven’t paid your bill, and then you must show proof from your loan holder that you’ve started making payments again. Or if one of the findings is an error, you must provide documentation from one of the credit bureaus that you reached out to fix the error.

Financial counselors and coaches from your installation can help walk you through your appeal. They can also advise you on any financial difficulties you are having.

More on financial coaching: How to Get Free Financial Coaching


Security Clearance Mitigating Factors

There are certain circumstances when personal finance issues may not impact your clearance. They’re mitigation factors. The Adjudicative Guidelines layout all of the mitigating factors that can reduce concern. Here’s when financial problems might not be an issue.

More on Mitigating Factors: The Adjudicative Guidelines

Here’s the Bottom Line

Keeping your finances in order is part of your job in the military. Not meeting your financial obligations makes you a risk to national security. Your financial behavior plays a major role in getting and keeping a clearance. Meeting all of your financial obligations will help you protect your security clearance now and in the future. If you’re having financial problems, say something. Don’t wait until your security clearance is in jeopardy. Contact your installation financial assistance office to get help with your current financial situation.

Want to learn more about personal finance in the military? Check out and subscribe to the latest episodes of the Military Money Show below.

Photo by Senior Airman Kristof Rixmann