topic Re: Application Gross Income Question... in Credit Cards

Application Gross Income Question...

SimonP — Wed, 04 Jan 2012 05:18:26 GMT

I know we are being a little greedy here, but we as well want to apply for a Chase Sapphire Preferred card for my wife. Her score is around the 800 level and she already has Chase Freedom and BOA with about 20K combined limit and AAoA 3 years. She is a student, so basically she doesn’t have an income but we file a joint tax return. What should she put on the gross annual income field of the application, my income or just zero?

Re: Application Gross Income Question...

Anonymous — Wed, 04 Jan 2012 05:33:25 GMT

Im in the same boat as you except im not married yet just engaged. My fiancee is also a student but with no source of income so im in this thread as well to see what answers pop up

Re: Application Gross Income Question...

RyVision — Wed, 04 Jan 2012 05:36:43 GMT

@SimonP wrote:
I know we are being a little greedy here, but we as well want to apply for a Chase Sapphire Preferred card for my wife. Her score is around the 800 level and she already has Chase Freedom and BOA with about 20K combined limit and AAoA 3 years. She is a student, so basically she doesn’t have an income but we file a joint tax return. What should she put on the gross annual income field of the application, my income or just zero?

I may not be familiar with that situation. However, it would make sense to me being you live in the same house, are married, so legally obligated while married for debt (I think for the most part) and file jointly, that your individual income would be the total HHI and that's what you'd put down. I'm rather sure "0" would guarantee a denial.

I'm somewhat hoping my response triggers people with more experience and knowledge with your type of situation to chime in with more.

Re: Application Gross Income Question...

Anonymous — Wed, 04 Jan 2012 05:42:29 GMT

A new law went into effect last October that you can read about click here that may answer your question.

Re: Application Gross Income Question...

RyVision — Wed, 04 Jan 2012 05:43:24 GMT

@Anonymous wrote:
Im in the same boat as you except im not married yet just engaged. My fiancee is also a student but with no source of income so im in this thread as well to see what answers pop up

Seems to me I've read in that situation, people can apply as joint applicants (you would be the responsible party , however she would be responsible as well, only you'd be applying for credit for her under your file, so it means more than an AU). And when your fiancee or spouse at the time later wanted to apply after gaining income, the joint history would count as her own, with more positive (or negative, depending how it's handled) impact on her score and file.

Re: Application Gross Income Question...

Anonymous — Wed, 04 Jan 2012 05:43:52 GMT

See, I'm not totally sure about this either. Credit card apps used to ask for total HHI, now they just generally ask for your personal income from all sources.

Re: Application Gross Income Question...

RyVision — Wed, 04 Jan 2012 06:01:14 GMT

@Anonymous wrote:
A new law went into effect last October that you can read about click here that may answer your question.

After reading that I have a better understanding of it myself. With that law, both posters would have to look into applying as joint applicants in order to build their SO's credit and have it count while being able to show income in order to get it.

Or either poster could add their SO as a joint account holder for a card they already have (if the CCC allows it) and it would show on their SO's CR (for building a file, for new credit, it would have to be the new joint app to add an account).

Simon and Root would both have the choice of adding a joint account holder (current card) or apping and taking an INQ as the primary on a joint application for a new credit account.

With the law it becomes more of a legal question than a credit question, per se'

[EDIT]: I should add Simons wife can apply under her own name using HHI if they live in a community property state like CA or TX as stated in the article. The map for more such states is linked below:

Community property states

Re: Application Gross Income Question...

SimonP — Wed, 04 Jan 2012 06:01:06 GMT

@Anonymous wrote:
A new law went into effect last October that you can read about click here that may answer your question.

If we knew this sooner, she would have applied before October 1st

I guess she needs to be happy with what she already has until some angry wives make some senators/congressmen change this law. There is another message in this law: don't stay at home and go to work! The irony here is the employment rate!!

Re: Application Gross Income Question...

RyVision — Wed, 04 Jan 2012 06:02:14 GMT

@SimonP wrote:
@Anonymous wrote:
A new law went into effect last October that you can read about click here that may answer your question.

If we knew this sooner, she would have applied before October 1st

I guess she needs to be happy with what she already has until some angry wives make some senators/congressmen change this law. There is another message in this law: don't stay at home and go to work! The irony here is the employment rate!!

See above post and check the map if you still want her to have a card under her own application and name only.

Re: Application Gross Income Question...

SimonP — Wed, 04 Jan 2012 06:06:21 GMT

@RyVision wrote:
See above post and check the map if you still want her to have a card under her own application and name only.

Thanks for the link. Unfortunately we are not in the blue areas

Re: Application Gross Income Question...

laz98 — Wed, 04 Jan 2012 06:30:55 GMT

what about 2 people who are for all purposes married, but not legally, on paper, married? seems like they get screwed by this rule too.

Re: Application Gross Income Question...

Anonymous — Wed, 04 Jan 2012 06:34:22 GMT

@laz98 wrote:
what about 2 people who are for all purposes married, but not legally, on paper, married? seems like they get screwed by this rule too.

It sounds like they could apply as joint applicants, as far as I can tell. Which doesn't really screw them over any more (or any less) than married couples.

Of course, the community property state part might be the difference.

Re: Application Gross Income Question...

Walt_K — Wed, 04 Jan 2012 06:34:35 GMT

I haven't kept up on this, but remember reading at the time that they took some of the teeth out of it. After some backlash, I'm pretty sure a regulation or something issued explaining that the law doesn't require you to exclude HHI. It's a little more nuanced than that. The lender has to make a decision regarding ability to repay obligations. If the lender asks for HHI, the lender cannot base its decision as to the applicant's ability to repay solely on the HHI. If they don't ask for HHI, then this isn't triggered. I don't think there is anything that says you can't list HHI. But search around some more to be sure.

Re: Application Gross Income Question...

Anonymous — Wed, 04 Jan 2012 06:36:10 GMT

@laz98 wrote:
what about 2 people who are for all purposes married, but not legally, on paper, married? seems like they get screwed by this rule too.

Its not a rule, its a new LAW. Its only been in effect since October of last year so, I don't know how many people know about it. I don't know how many of the credit card companies know about it and if they are obeying it.

Re: Application Gross Income Question...

laz98 — Wed, 04 Jan 2012 06:38:37 GMT

@Anonymous wrote:
@laz98 wrote:
what about 2 people who are for all purposes married, but not legally, on paper, married? seems like they get screwed by this rule too.
It sounds like they could apply as joint applicants, as far as I can tell. Which doesn't really screw them over any more (or any less) than married couples.

Of course, the community property state part might be the difference.

unless they don't live in a CP state, right? or don't want to intertwine their credit histories like that? although, after i posted my first response, i realized this could probably apply to domestic partners as well.

Re: Application Gross Income Question...

RyVision — Wed, 04 Jan 2012 06:46:14 GMT

@laz98 wrote:
what about 2 people who are for all purposes married, but not legally, on paper, married? seems like they get screwed by this rule too.

Again they'd be stuck with the joint application or co-owner account option. When applying for a new account together, 1 with the "credit power" as the primary, the other as a legally obligated AU in a sense (though it will not report as an AU on the secondary's CR, it should simply report as owned). The primary applicant taking the INQ hit and the secondary getting the same perks (or de-perks) as the primary with no HP. Or asking the issuer their policy of adding a joint owner after the fact to an already up and running account.

One issuer is legally able to partially bypass this new rule due to their uniqueness. That's AMEX, they don't have AU's, a primary can add a card member to an established or new account and it works nearly the same on a report as though the additional card member owned the account. AMEX members have always been "members" so they're grandfathered in with that uniqueness (other cards have tried but since they didn't start out that way, they can't switch). It's also why the backdating feature of AMEX is unique to AMEX.

Re: Application Gross Income Question...

SimonP — Wed, 04 Jan 2012 06:46:50 GMT

@Walt_K wrote:
I haven't kept up on this, but remember reading at the time that they took some of the teeth out of it. After some backlash, I'm pretty sure a regulation or something issued explaining that the law doesn't require you to exclude HHI. It's a little more nuanced than that. The lender has to make a decision regarding ability to repay obligations. If the lender asks for HHI, the lender cannot base its decision as to the applicant's ability to repay solely on the HHI. If they don't ask for HHI, then this isn't triggered. I don't think there is anything that says you can't list HHI. But search around some more to be sure.

Chase doesn't ask for HHI, only income. I guess even if you can put HHI as the gross income, then the problem would be the "Employer" field. Before this you could just leave them blank and put HHI in its appropriate area. She did this in 2010 when she got her Chase Freedom. I see that CITI applications still ask for both fields: gross income and household income.

Re: Application Gross Income Question...

quest208 — Wed, 04 Jan 2012 06:49:30 GMT

i guess she doesnt want to be an AU on your cards?

sorry that i dont have an answer to your OP question.

Re: Application Gross Income Question...

SimonP — Wed, 04 Jan 2012 06:53:02 GMT

@quest208 wrote:
i guess she doesnt want to be an AU on your cards?
sorry that i dont have an answer to your OP question.

No problem with the AU. I am going to add her to my Amex. The problem with AU is that there is no signup fee

Re: Application Gross Income Question...

RyVision — Wed, 04 Jan 2012 07:00:00 GMT

I have to add in Simon's case, some issuers are now including more than one income source line or at least more sources of income. If the applicant puts 0 they can still claim spousal or HHI in another line which infers financial responsibility of the applicant. I just checked for the Chase Sapphire and the drop down for "source of income" allows "home maker" and "other" in that case I'd expect to call in and explain HHI\spouse.