Want to get approved for a credit card - but zero income proof - what do i do?

[Anonymous]

I want to apply for a credit card and I need some advice.

My TU is 757 and EQX is 754

I have zero negative marks on my credit report.

I am trying to start my own business online and I could really use a credit card to help me out for little things here and there.

How do I go about the income part when they ask for that?

I have zero proof of income. Right now I'm just getting by by doing odd jobs and selling on ebay.

I don't want to say anything that'll ruin my chances for getting approved.

Do I lie and tell them I make $100,000 a year?

I know from reading "Do You Make These 38 Mistakes With Your Credit?" that having a high paying job does nothing for you getting approved, its all about your scores.

[llecs]

Report to them your income you earned doing these odd-jobs and Ebay. Legally, these do have to be declared on your 1040. Also, report it on your 2011 taxes if you haven't done so already and that way you can carryover that income on your CC apps and have the proof to back it up. Ultimately it boils downs to affordability of your housing, car, everyday expenses, etc. If using assets to pay for these items (e.g. using IRAs, 401(k), savings, etc.) and your Ebay and other income was virtually non-existant, then put down retired. Don't lie though. Illegal and unethical.

Another alternative is to start your own business first. Pay yourself a salary of $x and that way you have proof of payment and you can legitimately claim what you earn. I did that. I started my own business. I used my accounting software to print my own checks of a salary of my choosing and filed the taxes to make it legit. It made it much easier to apply for credit.

It's not all about the score. Take my folks. They are about 70, have excellent credit with very high FICOs, but income is probably less than $1000/mo after odd and end jobs and interest income. Moreover, their DTI is probably 300% plus when you factor in their mortgage and other payments. FICO means nothing in the eyes of their lenders. It's all about income in relation to their expenses and my parents gave up after trying for a refi.

[Open123]

It's best to never lie on financial applications.

Just report the amount of income you made doing the odds and end jobs.  If they're above 5 or 6k, you'd have to file taxes anyway.  I'd report an estimate that is close to what you're going to file.

[LS2982]

@Open +1

Do not lie on yur income on your app OP!

[Anonymous]

I have no proof - I am coming out of a long battle with some demons - sober 8 months now - so I have not even made enough to file for taxes in the past few years

Sad I know

I am getting back on my feet and a new credit card would help me tremendously

I do like your idea of starting my business and giving myself a salary and using that on my taxes

Questions:

What software did you use?

Can't you file for taxes quarterly or something instead just once a year? I figure once I have proof of income from cutting myself a few checks I could pay my taxes on my income for that quarter and use that as proof of income.

But as of now I think I'll take the 12 point hit and apply and see what happens.

Should I go to CitiBank and call their 800 number and get to someone in their credit department and take it from there?

These would be my list of questions to make me look like I got my **bleep** together:

(From that book I mentioned earlier)

PHASE 1
1.    Do you review credit reports when someone applies for credit with you?
- Answer is almost always “Yes”

2.    Since I live in Michigan, which credit reporting agency do you use as your primary source for credit reports?
- This will tell all.
- Do they use your highest scores?

3.    Do you use a FICO score to determine my credit risk?
- Almost always a “Yes”

4.    If yes then ask do you use regular FICO credit scores or FICO industry option scores?
- Not much you can do here- it just makes you look smart by asking

5.    How does a major credit item effect your lending decision?
- This is where you will find out if you will automatically be turned down because of something on your credit reports
- Or if they will consider it after a certain amount of time has lapsed.

PHASE 2

6.    Ask if I have the highest scores possible what is the best rate you can offer me?
- Now you get a bit of an idea of what you might get

7.    What is the minimum FICO score needed to get the best rate?

8.    What is the minimum FICO score needed for approval?

9.    If I have a FICO score of let’s say “649” for example what kind of deal will I get?
- They’ll probably ask about your income
- Just don’t give your Social Security number!

[Anonymous]

Coming from a self-employed sole proprietor, I suggest the following:

1. Get a Federal EIN number.

2. Register your business in your state.

3. Open a business bank account.

4. Purchase a reliable accounting software program (I use Quickbooks, so I can transmit to my accountant).

5. Find an accountant that will "oversee" your business costs. I have an accountant that charges very little because I do most of the leg work, but she notarizes my income statement when needed).

6. Keep accurate records and make sure you can backup your accounting system with a paper trail.

7. Give yourself a salary that can be verified.

This will go a long way in establishing yourself as a responsible sole proprietor.

You may want to get a secured credit card for the time being, if you can't provide income documentation. As long as you maintain a positive credit history, everything else will fall in place when the time is right.

NEVER, EVER lie on a credit app (or any other issue that constitutes fraud). Take baby steps and you will get there eventually.

[LS2982]

@labs +1 this approach sounds more appropriate for OP