Super Contributor
Most employers consider income very sensitive information and will only release the information to third parties with the permission of the employee (except of course when legally required such as reporting to the tax authorities).
The way it works at my employer is fairly typical of big companies: we use this outfit for income verification. Basically I as an employee go to Human Resources at my company, and they give me a PIN number. I call an special phone number, enter my PIN, and a computer reads to me a single-use access code that a prospective lender can use. I give that code to the lender, and somebody from the lender calls the special number and enters the code to hear a computer voice read out my compensation and dates of employment. The idea of course is to protect my privacy as an employee by giving me control over who gets the information: only I know the PIN needed to generate a new single-use code, and each code only works once. There is NO other means by which my employers will verify my income to anybody other than the tax authorities.
The only time any lender has ever asked me for verification of my income was when my wife and I applied for a mortgage to purchase our current residence in 2002. In 2003 the lender offered us a low-documentation refinance because the rates had dropped and they wanted to prevent us from refinancing with somebody else, and at that time they did not request income verification. I believe one of the forms we filled out when applying for our mortgage in 2002 did authorize the lender to obtain a copy of our tax records from the IRS; I don't know whether the bank actually bothered to get our IRS records, but I read in the NY Times that until recently most lenders rarely bothered to check IRS records.
For other credit applications, such as car loans, credit cards, installment loans, etc., no lender ever asked me for documentation of my income so their only source of that information was what I wrote on the application. My student loans were long enough ago that I do not recall exactly what documentation they required.
02-15-2009 07:52 PM
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I believe dates from before Fico Scores even existed. I believe my Fico Scores have been pretty high for as long as Fico Scores have existed since I have never been denied credit and always pay my debts.