You are not required to proactively update income, however lenders are required by law to reasonably ensure that those they are extending credit to are able to pay back any debts accrued. This is usually in the form of a popup when logging into your account maybe once a year, or when asking for additional credit. You are however also required by law to be truthful when answering those questions when they are posed.
Each lender will have differing underwriting criteria. Any reductions would really depend on the lender, how your income compares to an existing credit line (i.e. as an extreme example if your income went from $50k to $25k, and your credit line was $30k that may seem fairly risky), and your debt to income ratio. If your individual credit lines are not a substantial portion of your income and most of that income isn't obviously being used by mortgage, car payment, and other monthly minimums on loans and revolving credit, you likely have nothing to worry about.
@KillingThemGingerly wrote:I have been working two jobs for the past several years. Due to that, my income has been pretty high. However, I will soon be going back down to just one job. I am happy for this but as you would expect, it will cut my income significantly (about in half). My understanding is you aren’t REQUIRED to go back in and update your income to existing creditors when it is reduced as long as you aren’t asking for a CLI or something.
My question is if in the future, I apply for a new credit card with my new income (reduced from what it was listed as before with previous applications) will that “snitch” on myself and have banks look at cutting my existing credit limits? My current credit score is 800 and I pay off statement balances in full each month.
Fwiw the two cards I am thinking of opening in the future are the Amazon Prime card (currently have a Chase Freedom) and then a third NFCU card of which I already have two.
I wouldn't worry about it. The credit report doesn't contain your income.
@KillingThemGingerly wrote:
@K-in-Boston wrote:You are not required to proactively update income, however lenders are required by law to reasonably ensure that those they are extending credit to are able to pay back any debts accrued. This is usually in the form of a popup when logging into your account maybe once a year, or when asking for additional credit. You are however also required by law to be truthful when answering those questions when they are posed.
I always thought it was legal to just ignore those questions. You cannot lie obviously but I thought nothing stopped you from just clicking out of the box and declining to update your income by ignoring it.
It is legal. They just suggest that you update your income, they don't require you to do it. If the banks want to require you to do something, they know how to do it. If you were required to do it and didn't they would close your accounts.
@KillingThemGingerly wrote:
@K-in-Boston wrote:You are not required to proactively update income, however lenders are required by law to reasonably ensure that those they are extending credit to are able to pay back any debts accrued. This is usually in the form of a popup when logging into your account maybe once a year, or when asking for additional credit. You are however also required by law to be truthful when answering those questions when they are posed.
I always thought it was legal to just ignore those questions. You cannot lie obviously but I thought nothing stopped you from just clicking out of the box and declining to update your income by ignoring it.
That's correct. The law requires lenders to reasonably ensure you can pay, and it is a violation of law to make fraudulent statements. There is no violation that occurs if you simply don't answer.
