How do they verify income when you apply for a credit card?

[MattH]

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.

[cabarkeep]

Discover said they couldn't verify my income at time of application due to it being at night so then they sent out a preliminary credit line of 18k .... asked me to send in my payroll check stub or tax return ... i sent in a recent payroll stub and they increased my line to 25k ...

Beautiful thing!  Thank God I did not lie about my income!

[MattH]

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@cabarkeep wrote:

Discover said they couldn't verify my income at time of application due to it being at night so then they sent out a preliminary credit line of 18k .... asked me to send in my payroll check stub or tax return ... i sent in a recent payroll stub and they increased my line to 25k ...

Beautiful thing!  Thank God I did not lie about my income!

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Congratulations on a 25K limit with Discover, the limit on my Discover is only a little over 10K.  Since my income today is substantially higher than it was when I got this card, maybe I could get it increased but I feel no need to bother, my wife and I have very ample available credit and emergency funds.

[wemmington]

MattH and Cabarkeep do you remember what your fico scores were when you got approved for discover?

  I will apply for Discover More card soon and think that maybe I should wait til my scores are a little higher.  

Message Edited by wemmington on 02-16-2009 08:58 AM

[Anonymous]

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@wemmington wrote:

MattH and Cabarkeep do you remember what your fico scores were when you got approved for discover?

  I will apply for Discover More card soon and think that maybe I should wait til my scores are a little higher.  

Message Edited by wemmington on 02-16-2009 08:58 AM

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I'm not MattH or Cabarkeep, but I was approved for the Discover More last August with a TU FICO (which is what they pulled) of 744. 

[MattH]

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@wemmington wrote:

MattH and Cabarkeep do you remember what your fico scores were when you got approved for discover?

  I will apply for Discover More card soon and think that maybe I should wait til my scores are a little higher.  

Message Edited by wemmington on 02-16-2009 08:58 AM

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My wife and I got all our credit cards before either of us had ever heard of a "Fico Score" and at least one of my cards (Amex Gold "Cardmember Since 1982") 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.

[wemmington]

Thanks Fevmlo and MattH for the reply.

Message Edited by wemmington on 02-16-2009 09:34 AM

[Anonymous]

It's been my experience that they don't care. I applied and got some piddly limit, since I don't have a huge history of living beyond my means.

My credit score and FICO score looks HORRIBLE, but my bank account makes me smile! 

The FICO system punishes the good people, and rewards the bad (anyone who needs debt).

Amex and Discover, AFAIK, did not verify my income. They didn't care that I make good money, have zero debt, and very little expenses. They only care about the near-worthless FICO score it seems. I've found that using the cards damages my score (I was making all my purchases on AMEX to push it to rewards crap). Even though I pay it off in full 100% every month I get hurt most likely because it is near 100% utilization (very low limit).

It makes me laugh in the long run, but will suck when I go to buy a house. Then again, by the time I'm going to be looking lenders and builders will be so hurting it won't be funny. Still got a few trillions in losses to go in terms of home values. Note - Computer modeling of value and risk, similar to what FICO is, helped get us in this mess.

[cabarkeep]

I think my Ficos were mid to low 700's but I have probably 8+ paid autos on the bureau and at the time i probably had about 6-7 credit cards with a high card of 25k with USAA.

Household income was ok probably around 125-150k annually, I think i showed around 6-7k per month on my w-2 ... i dont remember

    looking back i guess i got pretty lucky with the limit on the card ... luck can be a great thing thats for sure    usually my luck is not so good lol

[Anonymous]

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@Anonymous wrote:

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@MojaveMoon wrote:

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@Anonymous wrote:
There are a few that ask where you work and for work phone numbers, I have had at least one call my work and verify my income. I don't remember which card it was that did that, but my boss did let me know he had verified my income with them.

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I thought that the most that an employer can give out is that you work there but that an employer is not allowed to give out any other information such as income information

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"I think the way it works is, If someone asks "How much does whoever make?" they won't give it out, but when they already know the wages you are supposed to be making they can ask your employer a yes or no question, such as "I am verifying income on a credit app, does this person make this amount?"

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an employer is not allowed to give out any personal information such as imcome address, phone # etc.saying yes or no is the same as giving the info.