The Defense Department wants service members to have the life skills to successfully manage their finances and create good credit ratings, the director of the Pentagon's office of family policy, children and youth said.

Financial readiness lends itself to mission readiness, because it can be difficult for service members to focus on a mission if they have financial worries, Barbara Thompson told American Forces Press Service and the Pentagon Channel in a recent interview.

"One of the challenges is our young people aren't coming into adulthood with the life skills they need," she said. "Until you're in those circumstances, you might not know how to navigate the financial waters you're in."

Because DOD is keenly focused on financial readiness, the department begins financial training as early as basic training and offers financial guidance throughout a service member's career, Thompson noted.
 
"The more information they have about making choices, the faster their credit score is going to increase," she added.

A good credit rating will help service members obtain credit cards and loans and to pass credit checks required to rent apartments, Thompson said, but she warned that plastic should be used judiciously.

"When you get a credit card and use it to maintain your credit, you want to pay it off (monthly), and don't max it out," she said. "Make sure you pay it on time."

Incorporating such habits will "start to show the world -- and especially the three credit bureaus -- that you are responsible and have good credit, and lenders are more apt to lend you money when you need it," Thompson said.

Because financial readiness is a top priority in the Defense Department, Thompson said, the resources for help are numerous. One such resource is installation family centers, which offer personal financial managers to help service members develop plans for spending and debt reduction plans. Many banks and credit unions on military installations also offer those services, she added.

The Military OneSource website is another option for financial help. It features downloadable podcasts, CDs and articles on becoming financially fit, Thompson said, adding that more intense help to manage debt is available through the site's certified financial counselors, who can advise online or face to face.

And when a service member faces deployment, she added, financial well-being can bring up a completely different set of considerations.

"It's important that those who deploy have a financial plan in place so their bills are paid while they're gone," Thompson advised. "Couples need to communicate how to maintain two households ... so they're on the same wavelength about how spending should occur."

Thompson said she wants deploying service members to be aware of the Service Members Civil Relief Act, which offers protection when financial challenges such as rent concerns and late credit card payments arise back home.

Those in financial distress need to take the first step by recognizing the issue, and then must confront ways to overcome it and consider how intense the plan will be, Thompson said.

"If you're not disciplined, it's not going to do you any good," she added. "Make sure your goal is to reduce that debt, get out of it, and start your way to building good credit."

Watching one's credit score is vital to having and keeping a good credit report, Thompson added. Service members and their families should check their credit reports regularly, she said, noting they are available free annually from Experian, Transunion and Equifax, the three credit bureaus.

"You want to manage your credit reports, because it's really an unsafe world out there with cybersecurity, protecting social security numbers and banking online," she advised. "All of those things open you up for the potential of identity theft, and that is a really scary proposition."

In recent years, DOD has made strides in its financial readiness advice and training, and self-reported data on troops in pay grades from E-1 through E-4 show they've reached a level of feeling comfortable financially, she said.

"The numbers (of those with bad debt) have been declining ever since we started the financial readiness campaign," Thompson said. "Information and knowledge are power, and if you are savvy enough to go into a car dealer knowing how to negotiate, the better off you are."

Thompson emphasized that if a service member needs help, it's OK to ask for it, and resources are available.