Discover 4506-T Request

Anonymous · ‎07-07-2020

I've been working to rebuild credit the past few years & last October, got approved for $9.5K CL. I use this card very frequently but nearly always pay the balance in full or nearly in full every month.

This week, when I logged into check my account, I was blocked & after calling, found out that they required an income verification through the 4506-T IRS form.

I did sign the form (I felt I had no choice) and they also gave me the option to submit 3 months' worth of bank statements since the IRS is taking a long time these days. I also sent them the bank statements.

My question is —

What type of balance/activity would they be checking for in the bank statements?

If I passed the test with the bank statements, would they possibly close my account upon receiving the IRS info?

I ask because 1) I owe money to the IRS & I'm worried that will raise flags with them, and 2) I just filed some of my more recent returns, so due to this, the latest return that was filed was a few years back and reflects a lower salary (since in the last few years my salary has doubled).

TIA!

coldfusion · ‎07-07-2020

First and foremost they're looking for evidence in your bank accounts of deposits including regular payroll deposits to confirm your net income.

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Artist formerly known as the_old_curmudgeon who was formerly known as coldfusion

torry590 · ‎07-08-2020

They will be looking at deposits into the account. I would assume they are looking for them to add up to your stated income and be steady. I went through this verification process with their secured card. I had a lot of ATM usage as well as sending and receiving cash through my banks app as well as cashapp. I was worried they would get spooked by that but they didn't seem to bat an eye.

Here is a link to my thread: https://ficoforums.myfico.com/t5/Credit-Card-Approvals/Discover-IT-secured-approval-Grueling-process...

Anonymous · ‎07-08-2020

OK, I assumed as much — however do they also account for taxes & health insurance deductions?? On the application, it asks for your income which I (and I think most people) think of as gross income, not net (which would be reflected in the deposits).

coldfusion · ‎07-08-2020

@Anonymous wrote:
OK, I assumed as much — however do they also account for taxes & health insurance deductions?? On the application, it asks for your income which I (and I think most people) think of as gross income, not net (which would be reflected in the deposits).

They're as aware of tax rates and 401K deductions as everyone else. 🙂

They aren't looking for accuracy down to the last penny, they're trying to reconcile if what what they see is in the ballpark of what would be reasonable vs what you claimed.

(3/2024)
FICO 8 (EX) 846 (TU) 850 (EQ) 850
FICO 9 (EX) 850 (TU) 850 (EQ) 850

$1M+ club

Artist formerly known as the_old_curmudgeon who was formerly known as coldfusion

Loquat · ‎07-08-2020

At least they're willing to accept something other than just the tax transcript...not that I'd be any happier sending them my bank statements either. But their card, their rules. Thankfully we all have the option to walk away if we don't like the rules they've created.

Anonymous · ‎07-08-2020

Yeah, heavily considering just closing the account. :/ Thank you for the input.

longtimelurker · ‎07-09-2020

@Anonymous wrote:
Yeah, heavily considering just closing the account. :/ Thank you for the input.

Hoping that the answer is "No" but do issuers record such refusals somewhere that other issuers can see, such as LexusNexis or one of the smaller CRAs? As an issuer, I would consider refusing to verify income in such as a way as a possible red flag.

NRB525 · ‎07-09-2020

@longtimelurker wrote:
@Anonymous wrote:
Yeah, heavily considering just closing the account. :/ Thank you for the input.
Hoping that the answer is "No" but do issuers record such refusals somewhere that other issuers can see, such as LexusNexis or one of the smaller CRAs? As an issuer, I would consider refusing to verify income in such as a way as a possible red flag.

Each bank assigns someone to lurk MyFICO, and draw conclusions about their cardholders based on comments here.
#Sarcastic

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
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April 2022 EQ=811 TU=807 EX=805 - TU VS 3.0 765

longtimelurker · ‎07-09-2020

@NRB525 wrote:
@longtimelurker wrote:
@Anonymous wrote:
Yeah, heavily considering just closing the account. :/ Thank you for the input.
Hoping that the answer is "No" but do issuers record such refusals somewhere that other issuers can see, such as LexusNexis or one of the smaller CRAs? As an issuer, I would consider refusing to verify income in such as a way as a possible red flag.
Each bank assigns someone to lurk MyFICO, and draw conclusions about their cardholders based on comments here.
#Sarcastic

Not sure why the sarcasm! An issuer asks, and doesn't receive a response. They can obviously record it internally (and we believe amex does for example) so spreading the word wider could make sense