Clearance Applicant Asserts Credit Report and Delinquent Debt History Does Not Define Character

It is well established that a history of financial issues and delinquent debt is the leading cause of security clearance eligibility denials. Central to the adjudicative guidelines for financial considerations is the principle that an individual’s failure to live within their means, satisfy debts, and meet financial obligations may indicate poor self-control, questionable judgment, or an unwillingness to follow rules and regulations. These concerns can raise serious questions about a person’s reliability, trustworthiness, and ability to safeguard classified or sensitive information.

In a recent Defense Office of Hearings and Appeals (DOHA) case, the applicant argued that her credit report and history of delinquent debts did not define her character or who she was as a person. Below are the key facts of the case:

• In 2010, the applicant filed for divorce. The process took more than two years to finalize and cost approximately $40,000.
• Following her ex-husband’s death, his medical insurance lapsed, leaving the applicant responsible for significant medical bills related to multiple surgeries for herself and her children.
• The applicant purchased a vehicle for her son and later defaulted on the loan.
• A hospital obtained a judgment against her for unpaid medical bills.
• She had 14 delinquent debts in collection.

During the hearing, it was noted that the applicant had not taken any substantive action over the years to address or resolve these debts. In her appeal testimony, she maintained that her financial difficulties did not reflect her character, asserting that she was dependable, reliable, and honest, and that she had consistently prioritized her children’s needs. While her employer and others who knew her provided positive character references, the judge concluded that the financial evidence concerns were not mitigated. Because the applicant had failed to take meaningful steps to resolve her ongoing delinquent debts, her eligibility for a security clearance was denied.