CCC Verifying Income???

[Anonymous]

Normally one would need to complete a Form 4506-T which authorizes them to obtain a tax return transcript directly from the IRS.

I'm not sure if there can be clause in the application fine print which "authorizes" the CCC to obtain the data through a provider as though you had completed a 4506-T.

I know that most applications have generally wide authorization language stating that they are authorized to verify and obtain information from many/any source in relationship to your application....question is, does this include IRS tax return data for income verification?

It sounds like this database/information service accepts a request for verification from a lender.  I would assume that the lender merely indicates that they have obtained the requisite authorizations to obtain the data and the service probably relies upon that affirmative indication to pull from the IRS.  It would be somewhat like a merchant typing in a credit card number and then indicating the card and cardholder was present for the transaction and authorized the charge.  The bank relies upon that affirmative indication to make the transaction and only upon dispute will it be questioned, or upon some other "fraud" flag that it may raise.

Anyon have more info on this?

[Anonymous]

Actually, if a Credit Grantor wishes to verify income, it is simply done with a call to the listed employer. This also verifies length of employment . Have done it more times then I can count.

Personally, I do think the days of "instant credit" , especially higher amounts is coming to a close. I consider that one of the things the new credit card laws do that will indeed favor banks, as it gives them cover for lending.

For so long banks, mortgage companies, etc were basically blackmailed and social pressured into making loans that should never have been made and throwing money at people.

Now, with the new standards set forth in the Credit Card reforms, it provides them cover as all they have to say is, "we are only following your standards you recommended".

[Watchmann]

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@Anonymous wrote:

Actually, if a Credit Grantor wishes to verify income, it is simply done with a call to the listed employer. This also verifies length of employment . Have done it more times then I can count.

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And the company I work for has an option on our personal HR website where the employee can request the company to verify employment and/or income to a credit grantor, landlord, whoever by fax or snail mail.  If you are out looking for credit your employer or salary is no real secret if they need it to grant you credit. 

[Anonymous]

Some lenders have a policy of verification that requires specific docs, such as tax returns directly from the IRS, and do not provide the option of employer verification.  Technically speaking....paystubs, w2 and even letters of employment can be fudged or forged.  A tax transcript direct from IRS cannot.

[laz98]

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@MarineVietVet wrote:

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@laz98 wrote:

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@mgs2010 wrote:
I work in credit review for a large corporation and we have access to a system powered by experian that actually verifies income by pulling tax return records from the irs. I'm sure it costs the company a great deal of money to use, but it does provide information for the prior year tax return, which in most cases is a good figure to go by to verify capacity to repay a loan. I would guess credit card comapnies would use this same system, or request that information be faxed to them prior to issuing credit.

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maybe that's why i can't get any good credit cards.  i haven't filed a tax return since i got out of the military in 2004.

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Is that not required? With a couple of exceptions.

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i don't work.  i'm just a student & basically a housewife.  i don't have to file a tax return.

[Anonymous]

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@BungalowMo wrote:

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@mgs2010 wrote:
I work in credit review for a large corporation and we have access to a system powered by experian that actually verifies income by pulling tax return records from the irs. I'm sure it costs the company a great deal of money to use, but it does provide information for the prior year tax return, which in most cases is a good figure to go by to verify capacity to repay a loan. I would guess credit card comapnies would use this same system, or request that information be faxed to them prior to issuing credit.

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That's CRAZY!  Wouldn't they need my authorization to look at my tax documents?  Leave it to EX to be poking their big noses where they don't belong.

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Of course they need your authorization.  Without written authorization in the format prescribed by the IRS, if any creditor or commercial entity accesses your tax return information you can a) sue and hit the lottery and b) write them hate mail in care of the closest federal prison.

Also, someone mentioned income verification via one's employer.  While there may be some (or even many) employers who will accept this, there are also many who as a matter of policy will not release any information -- even if you provide written consent -- other than position and actual dates of employment. 

[Anonymous]

The Wall Street Journal posted an article about this recently.  Since then I have seen a few articles from other sources as well.  The Article in the WSJ is titled "Look Who's Peeking at Your Paycheck" (http://online.wsj.com/article/SB10001424052748703672104574654211904801106.html?mod=WSJ_PersonalFinan...) in the WSJ.

There have been a couple of thread discussions here on the MyFico Forum as well.

[MattH]

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@Anonymous wrote:

Actually, if a Credit Grantor wishes to verify income, it is simply done with a call to the listed employer. This also verifies length of employment . Have done it more times then I can count.

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My employers will only verify my employment and salary history to a third party with my prior authorization.  Aside from protecting my personal privacy, they don't want competitors and headhunters knowing what they pay everybody.  The way it works is I go to HR and get a PIN that only I know.  I then dial an 800 number and enter that PIN to hear a computerized voice reading a single-use verifier PIN to me.  I then give that single-use verifier PIN to the lender, and one of their people dials a 900 number and enters the PIN that I provided to hear a computerized voice reciting my salary history.  Once that single-use PIN has been used, it won't work again.  I can use my secret PIN to generate as many single-use verifier PIN numbers as I wish, but each of those numbers will only work once.  The idea of course is to give me control over who can access my salary data.

[Lyythine]

if you dont mind, may I ask who you work for?   That sounds like an awesome system!

[MattH]

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@Lyythine wrote:
if you dont mind, may I ask who you work for?   That sounds like an awesome system!

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I'm in R&D with a large pharmaceutical company, I can't say which but I believe many of the Fortune 500 use the same system.