I Need A Credit Card, where to Start?

[DangerNoodle]

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@Anonymous wrote:

@DangerNoodle Thanks for answering all my questions I appreciate it. 

May I ask another? Do they ask for proof of income in the applicatons?

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Not usually. Lenders generally only ask for proof of income when they suspect that you've lied about your income (for example, claiming you have a $100k income but can only make the minimum payment on a $500 balance).

American Express is usually the most likely to ask for proof of income when they believe you've lied, which for them is called a Financial Review, where they suspend all of your cards until you send in a form (IRS 4506-T) giving them permission to acquire your tax return transcripts from previous years to verify your stated income. Most other banks will usually just shut you down if they believe you've lied.

That being said, you should never lie about your income. Once you build enough credit, income generally plays very little in determining your creditworthiness/SL. Not saying you're intending on lying or anything, just wanted to get it out there.

Good luck!

[Anonymous]

Thank you DangerNoodle. I'm confident enough to apply now. The only way I could verify my income is through a paypal balance sheet at the end of every month, which is not the typical tax return route.

Alright. I will apply to atleast one, but now I'm wondering if I should apply to a few in one day?

I have my eye on

USAA

Paypal Mastercard

AMEX Blue Cash Everday

I think I will incur a 5 point hit for each hard inquiry, so maybe I'll go easy  with just one. I don't have any other open revolving credit cards besides a 300 Kohl's card.

Alternatively, I can hold off, pay down my kohl's bill from 100 (out of 300 limit), down to 5 dollars or what not, then apply with a higher FICO score and hopefully lock in a lower APR. Is it worth the patience to do so? How long would it take from paying a bill, lowering my utilization, them reporting it, and finally my score actually rising? Atleast a month?

I might not be that patient, lol, if I don't have a really good reason, that is.

Cheers and thanks again DangerNoodle. You've been very helpful and I know I'm pushing it with so many questions.

All the best,

[DangerNoodle]

You're not pushing it at all! It's a learning experience, and you're doing the right thing by asking questions here.

As for your last question, I'd honestly go right ahead and apply for the Blue Cash Everyday. It's generally a very easy card to get, and considering you have at least a few months with a store card, I don't see why you wouldnt be approved.

It will also open the door to more cards from Amex in the future.

If you decide to go for this, let us know if you get approved!

[Anonymous]

I'm wondering why you aren't filing taxes when your stated income is significantly above the threshold for a single person to file (I'm assuming you're single adult).  You're also missing out on deductions and tax credits that can possible add to your income.  You can be sure that once your credit reports start showing activity the IRS will start scanning your Social Security number against their records.

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@Anonymous wrote:

My bank would require proof of income from a tax return so they cannot approve a bank credit card.

I'm self employed and haven't filed for taxes in years. I now make around 15k a year, verifiable only through paypal balance sheet and the monthly deposits in my bank.

I make 15k a year, but that is all net income. I don't have any other bills or mortgages. All 15k goes in the bank.

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[Jnbmom]

Not sure of your situation of course, but are you widower? That would be the only circumstance where I believe you would Not have to file taxes, if not good luck with IRS they will be relentless when they catch on

[Anonymous]

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@Anonymous wrote:

I'm wondering why you aren't filing taxes when your stated income is significantly above the threshold for a single person to file (I'm assuming you're single adult).  You're also missing out on deductions and tax credits that can possible add to your income.  You can be sure that once your credit reports start showing activity the IRS will start scanning your Social Security number against their records.

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@Anonymous wrote:

My bank would require proof of income from a tax return so they cannot approve a bank credit card.

I'm self employed and haven't filed for taxes in years. I now make around 15k a year, verifiable only through paypal balance sheet and the monthly deposits in my bank.

I make 15k a year, but that is all net income. I don't have any other bills or mortgages. All 15k goes in the bank.

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I will expand on my situation. I indeed haven't filed for taxes in over 10 years. I started my online sound design business two years ago, and it is growing. My first year, I made less than 10k. I can anticipate from sales I will likely make around 15k this year, in which case I will need to file taxes. All of my records are online, neat and tidy, and can print out a list of all sales for the last two years.

May I ask what kind of tax reductions and credits you are talking about? If its complex, you don't need to go in depth, but alteast let me know what I should look up.

Cheers,

[Anonymous]

Thank so much @DangerNoodle. I will apply asap and let you guys know how it goes.

I have been reading on this site that just one revolving credit line might not be enough, atleast 2 or 3 is preferred. In which case, should I apply for all of them now, or open them half a year apart? How would you guys do it?

[DangerNoodle]

I sincerely apologize. I seem to have skimmed over the part of your post that mentioned that you haven't filed income tax in several years. That's going to be a major red flag for lenders, and as mentioned before, you'll have much less mercy shown towards you by the IRS once they catch on. I really suggest you find a way to get that straightened out ASAP.

This is especially true for Amex, being that their favorite method of income verification is via IRS records. Very seldom will they accept bank statements or PayPal spreadsheets if they decide to place you under financial review.

I'm not trying to discourage you from applying, but keep in mind that not filing tax returns is 1) a problem for lenders 2) a big no-no as far as the IRS is concerned. Unless you're still not legally obligated to file, this needs to be sorted out ASAP.

Good luck with the BCE app!

[Anonymous]

All is well @DangerNoodle.  I am not legally obligated to file since I did not make more than $10,400 in a single year. That will likely be higher this year so I will need to file, and plan on doing so

I'm building credit to start a new business in real estate investing. Once I get that going, I won't have to worry about prooving income for credit. It's just this initial stage when I'm just setting things up and raising my credit score as much as I can doing simple things (applying for new credit, keeping utilization low, etc).

Good News! I just got approved for Discover IT card - unknown what my limit is, they are doing a routine online check until 400am.

I compared the terms and the IT card seemed the way to go, and I believe was your first suggestion DN. Thanks.

I do not know if I will apply for another card anytime soon. I want to know what you think, DN, should I apply to one or two other places today?

[Anonymous]

I find it hard to believe that for over ten years your income was so low that you were not required to file income taxes.  Especially when in another thread you stated that you're repaying $740 per month for student loans.  I suppose I should believe that all your income for those years was going to pay student loans.  It seems to me you're playing a risky game which might not end well; especially when your credit reports start showing increased activity and start attracting scrutiny.

If you haven't filed taxes in years you missed out on the tax rebate checks that were distributed during the Bush presidency. Those rebates where then continued and combined with a tax credit, during the Obama stimulus.  You're also missing out on the opportunity to supplement your low income via Earned Income Tax Credit which comes in the form of a check from the government.

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@Anonymous wrote:

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@Anonymous wrote:

I'm wondering why you aren't filing taxes when your stated income is significantly above the threshold for a single person to file (I'm assuming you're single adult).  You're also missing out on deductions and tax credits that can possible add to your income.  You can be sure that once your credit reports start showing activity the IRS will start scanning your Social Security number against their records. 

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@Anonymous wrote:

My bank would require proof of income from a tax return so they cannot approve a bank credit card.

I'm self employed and haven't filed for taxes in years. I now make around 15k a year, verifiable only through paypal balance sheet and the monthly deposits in my bank.

I make 15k a year, but that is all net income. I don't have any other bills or mortgages. All 15k goes in the bank.

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I will expand on my situation. I indeed haven't filed for taxes in over 10 years. I started my online sound design business two years ago, and it is growing. My first year, I made less than 10k. I can anticipate from sales I will likely make around 15k this year, in which case I will need to file taxes. All of my records are online, neat and tidy, and can print out a list of all sales for the last two years.

May I ask what kind of tax reductions and credits you are talking about? If its complex, you don't need to go in depth, but alteast let me know what I should look up.

Cheers,

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