SCRA Benefits, Rebuilding Credit For Military and Family, and Other Small Tips

[swoops0823]

Hey All,

So I know i'm a new member here and I don't dare claim to know everything about credit. HOWEVER I know a crap ton about the military and about SCRA benefits and how to use them to your advantage as long as you're eligible. I know there may be young soldiers, spouses, recent vets, etc on this board trying to rebuild their credit or just keep things in order and I didn't want to keep this information to myself.

Quick Background about myself; I'm mid 20s, been in the army for 6 years, i'm a First Lieutenant and I deploy this month which is what got me thinking about this anyway.

OKAY. So long story short SCRA protects you from like 34 different things but in the realm of credit simply stated lenders are unable to charge you interest on a loan in excess of 6%. This typically only applies to loans incurred prior to your active duty period (typically.. some lenders make exceptions).

However there are misconceptions

1. Spouses aren't eligible (NOT TRUE)

2. You have to be deployed (NOT TRUE)

3. You can't apply for these benefits and recoup your money after the fact (NOT TRUE)

4. Companies will only lower to 6% and your loan is at 6% so there's no point (NOT TRUE!!)

Here are some companies and what they will extend to you:

CITI BANK : 0% APR for Period of Active Duty and all fees waived

CHASE BANK: 6% APR for Period of Active Duty and all fees waived + Blue Star Deployment Program

USAA: 4% APR for Period of Active Duty + an additional YEAR at same APR after active duty period ends

CAPITAL ONE: 4% APR for Period of Active Duty + an additional 180 Days at same APR after active duty period ends

SALLIE MAE: 6% APR for Period of Active Duty + an additional 90 days at same APR and no minimum payments

.. and a host of other lenders have special programs!

And that applies to ANY credit account. We're talking from Credit Card to Auto Loan to Student Loan to Personal Loan. So that brings me to my next point:

If you will qualify for these rates and you KNOW you're going on active duty (either initial enlistment or going from reserve to active) or deploying ahead of time TAKE THAT AS THE MOMENT TO REBUILD YOUR CREDIT. Think of it this way,

You have a credit card in your wife's name that's almost maxed out at 4000 out of 4500 credit line and a whopping 23% APR. Your credit score is only eh, and you're deploying in the next 90 days. You know if you apply for another Credit Card you'll be approved but also at a high rate. APPLY FOR IT ANYWAY! If you applied for USAA CC for instance, and got approved at a 25% APR it won't matter once you deploy. They'll lower it to 4% and $0 Balance Transfer Fee. Now you're helping your family out by having an APR at 4% for the next TWO YEARS while you rebuild your credit and save money.

Scenario Two. You desperately need a car but your credit stinks. The dealership offered you a rate at 15%. You signed up to join the navy and will be leaving in 6 months but you need this car now. Well. If you take the loan at 15%, once you formally leave for the navy that rate will drop to 6% for THE ENTIRE PERIOD OF ACTIVE DUTY. Even though your credit profile doesnt warrant it, you're saving a ridiculous amount of money.

The key here is to make these life changes before you leave.

I hope I explained all these things clearly. I wish someone had explained all this to me but alas I figured out the system on my own. Many companies have made this process easier and you can apply for benefits online. Other times you have to fax in documents. I have a standard form letter that i've used for the last three years as i've gone on and off active duty. I really hope there's someone on this forum who can benefit from this information. If you qualify it's a great way to save money as well as give yourself a fighting chance to rebuild credit. Thanks for letting me post guys.

[coldnmn]

Thanks for sharing.