The Government Can Access Your Credit Report, Even If You’ve Frozen It

Agencies requesting background investigations from the National Background Investigations Bureau no longer need to tell subjects to unfreeze their credit.

Uncle Sam now has access to your credit report. Even if you’ve frozen it with the major credit bureaus.

The National Background Investigations Bureau issued a Federal Investigations Notice in early October stipulating that it no longer has to ask applicants to unfreeze their credit prior to a federal government background check. The change is in response to the Economic Growth, Regulatory Relief, and Consumer Protection Act, which was signed into law in May. The law included an amendment that allows credit bureaus to access frozen credit reports for background screening purposes.

This change allows NBIB to receive the credit information it needs without the applicant unfreezing his or her credit report.

The change is important, both as the government looks to increase the number of cleared individuals under continuous evaluation, and as security clearance holders find themselves increasingly subject to attacks on their personal information, from the 2015 Office of Personnel Management data breach to the more recent Defense travel system hack. One of the recommendations made in the wake of the OPM breach was for security clearance holders to place a hold on their credit. A credit freeze means nefarious actors can’t access your credit, open a loan or create a new account in your name.

Background investigation cases submitted to NBIB on September 24 or later are subject to the new guidelines. Employees whose background investigations were sent before September 24 would still need to unfreeze their credit before investigators could complete their reviews.

The change paves the way for continuous monitoring of cleared employees for any troubling financial activity, instead of the current practice of conducting periodic reinvestigations.

“This new law fixes a major vulnerability for all security clearance holders and is long overdue,” said Sean Bigley, security clearance attorney and former OPM background investigator. “On the other hand, it also is likely to increase the number of security clearance revocation cases based on financial concerns, since clearance holders can now no longer rely on the months or years [between reinvestigations] to clean up their credit.  With continuous evaluation and the government now instantly aware of any financial delinquency, it is more important than ever for security clearance holders to establish a budget and live within it.”  

Why Credit Reports Matter

Financial issues are by far the biggest cause of security clearance denial or revocation. It’s critical that the government is able to check credit reports as a part of a background investigation—both the initial investigation to determine clearance eligibility, and on a continuing basis. But with the seemingly continual attacks on security clearance holders’ personal data, it’s also critical that national security workers be able to protect their finances through steps such as freezing credit. The passage of the Consumer Protection Act ensures the government has access to the data it needs, and clearance holders are able to maintain a freeze on their credit. Previously, clearance holders would have to unfreeze their credit for the duration of a background investigation. Given the delays in processing, it was nearly impossible for an applicant to know when the government would need to pull a credit report—it could be  anywhere from 30 days to 30 months.

“Access to credit reports is a means to compare one's financial disclosure submission to that which is publicly available to determine variance,” said Christopher Burgess a security professional, CIA veteran and regular ClearanceJobs contributor. “Should a difference exist, or unaccounted income or assets appear, these at a minimum warrant the attention of investigators. Unexplained income may be indicative of a clandestine relationship,” as was the case with former CIA officer turned KGB double agent Aldrich Ames, as well as  more recent cases of Jerry Lee (CIA), Candace Claiborne (State), and Ron Rockwell Hansen (DIA)—all of whom had unexplained dollars in their bank accounts.

“Similarly overspending, financial insolvency and other indicators of financial irresponsibility provide the adjudicators with indicators that the individual may not be suitable for a security clearance,” Burgess said. 

Lindy Kyzer is the editor of and a former Defense Department employee.