I do it all the time, although I prefer using cheap Testor's putty on the hulls, roadwheels, and/or tires.. Thins with rubbing alcohol and applied in a stabbing, stippling action with a short-bristled brush...
Mud's color depends on the track's AO, from the dark gray dirt of the Central US to Euro-Brown, to the red clays of Georgia, Oklahoma, and the Central Highlands of South Vietnam ...
I wouldn't use expensive model paints with FS numbers or even more expensive pigments though.. Just go get some tempera paints (I keep the primary colors plus black & white, on-hand), and use those instead... Craft paints are cheap and have plenty of "earth-tones" too...
With Red, Blue, and Yellow tempera (either powder or pre-mixed), along with the black and white, you can make any shade of mud you can dream up... They can also work well as mud themselves when mixed in with talcum powder...
Sheet-rock mud works well too... As does real mud...