Security Clearance Denial

Applying for Security Clearance and have Delinquent Debt?

What should you do…

1. Start correcting the problem immediately, document all efforts, and keep a chronology of activities.

2. Get credit reports from all three national credit reporting companies and use the reports to make a list of all your creditors, but understand its limits. Things that sometimes don’t show up on a credit report including unpaid alimony, tax delinquencies, automobile leases, and some other debts. Occasionally erroneous and duplicate information appears on a report. Although the clearance application form (SF86) only asks for 7 year’s worth of financial information; adjudicators may consider all financial information available to them, including financial information collected by field investigators from court records, rental/utility records, personal references, real estate records, and employment records that does not appear on a credit report.

3. Immediately take action to dispute any erroneous information on the credit report.

4. Make at least minimum regular monthly payments to all creditors.

5. Contact those creditors that have unpaid claims against you, insure that the claims are legitimate, and set up a repayment schedule as soon as possible. Try to communicate in writing and keep copies of all correspondence. If you communicate by telephone, make a written record of the telephone call and include the date, name of the person you spoke to, and a gist of the conversation.

6. Seek credit counseling if necessary, preferably with organizations that is a member of the National Foundation for Credit Counseling. They may be able to negotiate better repayment terms and lower interest rates than you are able to obtain by yourself.

7. Don’t be afraid of bankruptcy, if your situation warrants it. If you seek the services of a reputable credit counseling service first, they will advise you whether your situation can be resolved better through bankruptcy or debt consolidation.

William H. Henderson is a retired security investigator, author of Security Clearance Manual, and regular contributor to and

Comment Archive

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    When I did PRSIs and SPINs dealing with financial issues I always recommended the SUBJECTs obtain a copy of their credit report from the three credit reporting companies. I even had the numbers for all of the companies and provided them to the SUBJECTs if they asked. Most did.

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    I recommend people go to They can access all 3 credit reports there immediately. At this website they deal directly with Experian, Equifax, and TransUnion, so they will not be sharing any personal data with a third party. This website was set up by the credit reporting agencies to comply with the government requirement to provide a requestor one free report a year on themselves from each of the 3 agencies. This can also be done by telephone but it takes a week or so to get the reports.

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    I provided that site as well yet most of the SJs I was interviewing were in AIT Training in the military and did not have access to the internet.

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    I have some 30 day delinquencies on my credit report. Specifically, my mortgage one time in June 2008. My truck four times in 11/07, 12/07, 4/08, and 6/08. Also another vehicle in 3/08. Will these disqualify me from becoming a special agent with Secret Service?

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    Mr. Henderson,

    I am thinking of ordering your book on Security Clearances through Amazon, but just want to make sure a newer version is not coming out anytime soon.

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    Mr. Henderson,
    Thank you for providing this site for someone to ask a professional for their best advice.
    I have recently graduated from DeVry University where I received my Associates in Network Systems Administration and am looking forward to obtaining a job in this new field.
    My question I will try to make as brief as possible. I have seen many jobs that I would like to apply for but have never had a Security Clearance and I have also just gone through Chapter 7 and waiting on my discharge papers.
    Is there any way a person like myself can apply for a Security Clearance so I can apply for those jobs or do I have to wait to be offered a job and then have them send me through that process for the clearance?
    I know that there are many good jobs out there, especially with the local and federal government. I would like to at least have a better understanding so that I will know what is required for any future opportunities.

    Thank you,

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    Secret Service Applicant:
    Normally delinquencies of less than 90 days are not significant enough to warrant any special attention during a security clearance investigation and do not have to be listed on the clearance application form (SF86). However, it is my understanding that the Secret Service has a supplement to the SF86 that I have not seen, so I don’t know what questions are on that form. When applying for a job with the federal government that requires a security clearance, your background investigation will be adjudicated for both employment suitability and security clearance eligibility. These are separate processes with different (but somewhat similar) adjudicative criteria. Federal employment suitability criteria are covered in 5 CFR 731.202, but agencies are allowed to create additional job-specific criteria. I don’t know if there are any specific financial criteria for Secret Service S/A positions.

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    My best guess is that a 2nd edition to Security Clearance Manual will not be published until late summer 2010. I’m at the mercy of the ODNI, OPM and their JSSRT. There’s no point in publishing a revised version of the book until the new SF86 and new revised federal investigative standards are approved and implemented. I thought they would have everything finalized by now, but there have been delays.

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    Mr. Henderson:

    I will be having an MBI done for a Moderate Risk position very shortly. I have the following concerns about delinquent debt.
    1) I am currently in hardship programs with 5 credit cards where they have reduced my interest rate and set up a pay in full program at lower monthly payments. After reviewing my credit report I found that 3 of them have shown me as 30 days past due since I entered their program over 6 months ago. The SF-85P asks for those delinquent debts 180 days old, should I report them?
    2) I have a guaranteed student loan that went delinquent over a decade ago and the balance ballooned from 12,000 to over 40,000. I am sure at some time is was over 180 days delinquent, but the most recent delinquency on my credit report is from 2004 which shows 4 moths at 120 days while I was having it consolidated with another lender. I have had a number of deferrments on this loan and the balance has now reached $50,000 but is showing current. Should I report as over 180 days?
    3) Will my wifes credit report be checked as well? Should I report delinquent debt in her name that does not show up on my report? She is disabled and we have had significant medical bills that has caused a significant portion of this debt.
    4) I am currently under an installment payment plan with the IRS for a $10,000 tax liability from 2007. How do I report that on the SF-85P or the declaration for federal employment?
    5) Last question. The other significant contributor to my financial situation has been wifes illegal drug use. She has been in rehab 5 times in as many years running up substantial debts during relapses. She has been clean since 12/08, but has serious other health issues. Is it appropriate to provide this information? Will she be asked about it in a personal interview?

    Thank you

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    Great website. My situation is not that bad, I have a very good chance of getting an SF85p for DHS but I want to be at ease.

    Recently I got the LOI for a state tax lien of about $700, which I have been paying two or three months prior to me submitting the e-Qip. I’ve stored all of the agreement letters and the electronic payments debited from my account are in my bank statements. I’ve sent those in to the adjudicator.

    I also got called out for a charge off account of about $230. This account was part of a debt counsling and consolidation program I’ve been in since 2006, which I wanted to do to avoid bankruptcy. The last payment to that account was made, literally, a week after my credit report was pulled for the investiogation. I didn’t list it because a. regular payments were made and the balance updated in my report and b. i already have a DOD Public Trust and when I got that one the account was in the same charge off status, with a higher balance. I sent them an explanation of this, along with the statements from the debt consolidation guys and my bank statements.

    Other than that there are no further blips. No drug use, DUIs, bankruptcy, etc. I should be ok but the wait is killing me!



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    A thing I left out: this is for getting an EOD (Interim?) determination.

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    I was offered a position at a government contracting company and I have to go through an interim SECRET security clearance. I have no criminal history and great employment history. My only concern is my debt, I have 2 student loans totalling about $9,000 for wich I have recently set up payment plans. Also, I have a few parking tickets from the district gov’t that will be paid by next Friday as well as a few misc. things and then there is my hospital bills which I have not been paying because I haven’t been able to afford it. I am a single mom trying to do all that I can and pay all of my past bills whenever possible, I have just fell behind on my bills but I am getting settlements and payment arrangements set up. What I want to know is will this affect me recieving my clearance? I was told that the investigators really look for debts owed to the government that are not being paid. Is this true? I have to go onto the equip site this weekend to fill out my paperwork and I want to know what should be listed and what so I need to show exactly. I REALLY need this job…its making significantly more than I make now and I would be able to do more with my bills. Please help!!! : )


    Nervous Nelly in DC

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    Current Low Risk Employee:

    1 & 2) The SF85P only asks for debts that are currently 180 days or more past due. You should only list debts that are currently 180 days or more past due.
    3) No, your wife’s credit report will not be checked. You should list any debts in your wife’s name that are 180 days or more past due and that you are obligated (legally or morally) to pay.
    4) If you have been making payments as agreed, you don’t list it on the SF85P or the OF 306.
    5) Spouses are not normally interviewed, except when it is necessary to resolve a security/suitability issue. The MBI includes a Personal Subject Interview (PRSI). You should disclose information about your spouse’s drug problems and its relationship to your financial problems during your PRSI.

    Although you may not have to list anything on your SF85P or OF 306, be prepared to discuss your financial history, your spouse’s financial situation, and her drug involvement and have documentation with you during your PRSI.

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    My husband is filling out the SF86 (eQip) and they are asking for my SS#. Do they run a credit check on me or background check?? My credit is not so good right now. I have been on time with payments but am little overextended with the limits. My background is perfect. I have been searching online and cant seem to find the answers. Please help.


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    I’m in the process of going through a public trust. A few months prior before completing the eQip, I started my bankruptcy process. I filled for bankruptcy because of bills from a divorce and medical bills for my daughter who has disabilities. I worked with the debtors but, they wouldn’t work with me. Anyway, I completed my eQip and didn’t answer the questions about 180 days correctly. I thought because I was going through the bankruptcy I was out of the 180 day realm but, that wasn’t the case (now I know). I received a LOI, as I said I was in the process of a bankruptcy. When I received my LOI, I was a few days out of my discharge. As soon as I received my discharge, I sent it to the adjudicator. It was three accounts where the debtor didn’t change the status of my accounts on my credit report so, it made it seem that the accounts wasn’t included in the bankruptcy and it was still a balance owed/opened. Those accounts were 180 days overdue. I sent my bankruptcy paperwork, discharge of accounts, and two statements of the migrating circumstances. I submitted a statement with my eQip application about my financial problems. I guess what I’m asking is will I most likely be denied my public trust? I’ve held a suitability for the past 12 years. Honestly, I really didn’t mean to answer the question in a dishonest manner.

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    @Need Help, Bankruptcy is a legal means for someone to discharge debts and depending on the circumstances and past history, can easily be mitigated. You neglected to say whether you listed the actual bankruptcy on the SF-85P. If you did then it can probably be said with confidence that the issue of not listing the three overdue accounts will be mitigated favorably.

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    @Mr. Hakaman, First I want to thank you for the quick response and information you provided. Yes, I did put on my SF-85P that I was in the process of a bankruptcy. As soon as I received the discharge from the courts I sent it to the adjudicator, along with the form submitted to courts listing all the creditors. Those creditors was listed on my paperwork. I have one more questions this is not my first bankruptcy, ten years ago I filed for bankruptcy. This is my second time due to unforeseen circumstances. Will that be held against me?

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    @Need Help, anything that happened 10 years ago is out of scope, but adjudicators will consider the reasons for why you had to file bankruptcy back then and more recently to determine if there is a pattern of irresponsibility on your part.

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    @Mr. Hakamaa, Thank you for taking out the time to respond to my questions. I really appreciate it… This site is very resourceful. Thank you again…

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    The new SF85P is going to have SF86 financial record questions on it (very detailed). I have no delinquent debt. My credit report is excellent. I have no bankruptcies. I have no tax liens. I have never misused a company credit card. I have never gambled. I own 12 properties and I have frequently paid the property taxes late. I didn’t think it mattered in the past as it did not show up on the credit report and I always paid it from a few days to several months late. The suitability for financial irresponsibility is that dishonesty must be shown. I am almost certain I have a couple of 120 day (that is the new standard on the new SF85P when released) but I wouldnt know what or when as they would have been non credit reporting items. The property tax issues were most of them would come due close to the same time and I needed to space them out. Also, there were so many with different schedules that it was difficult to track. They are all 100% paid and in this calendar year plus some of last year I have had no issues. I now have a spreadsheet and track it with that and and set aside money to take care of it in advance. Can someone define “dishonest” I found this in an a military adjudication site. Dishonest conduct includes deliberate lies, fraud, or deceit for personal benefit (e.g.,theft, acceptance of a bribe, falsification of records, falsification of employment documents, and deliberate financial irresponsibility with continuing, valid debts of a significant nature. Financial irresponsibility is only an issue if it rises to dishonesty.) The keys I see there are deceit or fraud for personal benefit. That doesn’t look to apply I also see “continuing” “valid” and “significant”. If there is no continuing or valid or significant and no fraud or deceit. I knew the penalty and interest associated and paid it. Could there be an issue I am not seeing?

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    @Concerned new SF85P changes,

    Based on your scenario, if you have no current delinquent debts, unpaid tax liens, or history of civil court judgments against you and you disclose all required information asked then there should be no reason you would not meet suitability requirements for a public trust position under the guidelines for suitability.

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    Thank you very much. It may still be a year or two before I have to have a re-investigation so I should have three good years of all on time. I read the OPM guidelines that state further that outside of 36 months “even” a dishonest debt (which I don’t have) is not elevated for review (I don’t know if I used all the right words).