The Foreign Service Journal, April 2003

I have just gone through the rigors of buying a house and obtaining a mortgage, and would like to share what I learned. You can delay paying your utilities, you can let yourmedical bills slide, you can ignore the cable bill, but you must be absolutely sure topay yourmortgage andyour cred- it card bills on time. Even better, pay them online. This is important advice for our colleagues serving overseas with- out — among other amenities — reliable mail. I am writing this because several potential lenders demurred at first because I had paid credit card bills and my mortgage late last year when Iwas overseas. While Iwas away,my bills accumulated andwent unpaid. They were reported as late to the credit rating agencies. While these late payments may be an aberration for me here in the U.S., for overseas colleagues without access to reli- able mail, they may be a regular occurrence. Despite the recent significant improvements in pouch mail service (kudos and applause to A/LM/PMP/DPM for this), it is still slow by comparison to regular mail. And there is the added problemof what happens to your bills while you’re on home leave, emergency leave, evacu- ation orders or TDY. Youmay not have access to a computer and, even if youdo, you might not have thought to bring all the passwords and PINs needed to access your various accountswithyou, so paying online becomes difficult. Meanwhile, arrangements to have your mail forwarded from post depend on someone’s good will. But even the greatest good will in the world can’t shorten the time itwill take for themail to catchupwithyou. By that time, your payment is already late anyway. Once I decided to buy a new house, I applied to several well-known companies offering mortgages, including USAA. But because of those late payments last year, my credit rating was not up to the lenders’ standards. Your credit rating has nothing to do with your net worth. You can have $150,000 in the TSP, another $50,000 in Series EE bonds, stocks and bonds, thousands in savings (for that down payment), and a lot of equity in your current house. Youmight have a year’s worth of sick leave that would cover your salary should you fall ill. The credit rating agencywhich lenders depend on does not measure any of this. It only measures how promptly you paid your mortgage and credit card bills. Your credit score is how they make the first cut. My advice to you is to pay your credit card bills and your mortgage promptly. I know this is difficult for those of you at the far ends of the earth. Some dedicated department employees haveworked very hard to improve pouch service, but it is ulti- mately dependent on a lot of factors over which the department has no control. Ultimately,my solutionwas to go to amortgage broker. I providedhimwithdoc- uments to prove my net worth and an I-was-overseas explanation for those late pay- ments. Within two days, he found a lender whomade themortgage at the going low rate. While there are ways around it, this is an example of how the hardship of over- seas service exerts an impact on your life. ▫ 4 AFSA NEWS • APRIL 2003 AFSA NEWS BRIEFS The credit rating agency ... only measures how promptly you paid your mortgage and credit card bills. Continued from page 3 V.P. VOICE: STATE BY LOUISE CRANE The FS and Your Credit Rating Hardship Working Group Update Under Secretary for Management Grant Green approved the recommendations of the Overseas Staffing Incentives Working Group that he had convened following a June 2002 GAO Hardship Staffing Study and a June 7, 2002, letter from AFSA (see State 036475 and the State Intranet site http://hrweb.hr.state.gov for a list of the recommendations). Under Secretary Green approved 25 recommendations for immediate action and 19 more for possi- ble implementation pending further analysis. By our count, AFSA originated 12 of the 25 proposals identified for immediate action, plus 9 of the 19 approved for further study. AFSA also proposed 8 of the 36 ideas that were turned down. Under Secretary Green told AFSA that his staff will now task out the implemen- tation of each recommendation and will keep employees informed of progress. We noted that July 2003 (i.e., the start of the 2004 assignment cycle) was a logical target date for getting as many as possi- ble of the items implemented, because a key goal of this initiative is to encourage employees to bid on hardship posts. AFSA thanks HR/CDA Director Ralph Frank, M/P Director Jay Anania, HR/CDA Officer Ted Gong, Allowances Director Margaret Uyehara, FLO Director Faye Barnes, EUR/EX Deputy Director Bill Haugh, and the two dozen other Foreign Service and Civil Service employees who worked on this project. We also thank our many members who sent us suggestions — 21 of which are now set for implementation or for additional staff work. Briefs • Continued on page 5