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Discover 4506-T @ random

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Regular Contributor

Re: Discover 4506-T @ random

Why would they do this to somebody has been good to them for 2 years? 

 

Perhaps others can pitch in but form what I understand if a lender requests a 4506-T on an already established account it means they don't believe you, your risky in their eyes, and looking for reasons to close your account. If a lender does request one your better off closing the account and moving on and the chances of it being closed are very likely. If not your in for a serious fight.

 

Not sure why they bother with them in a first and place and not just close the account for busines reasons. it seems that's what they want anyways.  

 

However i'm still new to credit... 



Currently planning gardening until December 2021 when all HPs drop. Perhaps a bit extreme but want more history before applying again.
Message 31 of 50
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Moderator

Re: Discover 4506-T @ random


@credit-user-19 wrote:

Why would they do this to somebody has been good to them for 2 years? 

 

Perhaps others can pitch in but form what I understand if a lender requests a 4506-T on an already established account it means they don't believe you, your risky in their eyes, and looking for reasons to close your account. If a lender does request one your better off closing the account and moving on and the chances of it being closed are very likely. If not your in for a serious fight.

 

Not sure why they bother with them in a first and place and not just close the account for busines reasons. it seems that's what they want anyways.  

 

However i'm still new to credit... 


There's a variety of things to consider why some of these requests are generated.

 

The blue bolded statement is really subjective.   These types of [4506-T] requests are typically system-driven based on any number of factors.  This isn't Peggy from Discover using it as punishment or not believing the information an accountholder provided.  This is about mitigating risk on an unsecured [credit card] loan and verifying income. 

 

An item to keep in mind, these requests while infrequent, can be triggered by any number of factors such as discrepancies of reported income versus known income sources, rampant or increased unsecured exposure, unusual transactions or abnormal spend patterns, etc.  Other factors can include, prolonged debt conditions, incremental debt versus reported income combined with things like score deterioration and so on.

 

Typically, if the accountholder has no objection to submitting the request then it just goes through its paces and life goes on.   Optionally, the accountholder can object to the request, but then the account may be subject to either a CLD or closure. 

Message 32 of 50
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Mega Contributor

Re: Discover 4506-T @ random


@FinStar wrote:

@credit-user-19 wrote:

Why would they do this to somebody has been good to them for 2 years? 

 

Perhaps others can pitch in but form what I understand if a lender requests a 4506-T on an already established account it means they don't believe you, your risky in their eyes, and looking for reasons to close your account. If a lender does request one your better off closing the account and moving on and the chances of it being closed are very likely. If not your in for a serious fight.

 

Not sure why they bother with them in a first and place and not just close the account for busines reasons. it seems that's what they want anyways.  

 

However i'm still new to credit... 


There's a variety of things to consider why some of these requests are generated.

 

The blue bolded statement is really subjective.   These types of [4506-T] requests are typically system-driven based on any number of factors.  This isn't Peggy from Discover using it as punishment or not believing the information an accountholder provided.  This is about mitigating risk on an unsecured [credit card] loan and verifying income. 

 

An item to keep in mind, these requests while infrequent, can be triggered by any number of factors such as discrepancies of reported income versus known income sources, rampant or increased unsecured exposure, unusual transactions or abnormal spend patterns, etc.  Other factors can include, prolonged debt conditions, incremental debt versus reported income combined with things like score deterioration and so on.

 

Typically, if the accountholder has no objection to submitting the request then it just goes through its paces and life goes on.   Optionally, the accountholder can object to the request, but then the account may be subject to either a CLD or closure. 


This.     Plus, I would guess that a substantial number of defaulters do have some reasonable payment history and so have been good  customers for a long time.     Then, stuff happens, e.g. job loss.    Then some obvious things might happen, such as growing balances and missed payments, but issuers may also be looking for more subtle patterns as well.   In any case, then the issuer gets into protection mode, and can CLD,  close or request a 4506-T.    In some sense, this last is the least aggressive form of AA, as the customer has a chance to prove that all is fine and escape unscathed.   Or, as FinStar says, can reject the request and be subject to other forms of AA

Message 33 of 50
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Regular Contributor

Re: Discover 4506-T @ random


@longtimelurker wrote:

@FinStar wrote:

@credit-user-19 wrote:

Why would they do this to somebody has been good to them for 2 years? 

 

Perhaps others can pitch in but form what I understand if a lender requests a 4506-T on an already established account it means they don't believe you, your risky in their eyes, and looking for reasons to close your account. If a lender does request one your better off closing the account and moving on and the chances of it being closed are very likely. If not your in for a serious fight.

 

Not sure why they bother with them in a first and place and not just close the account for busines reasons. it seems that's what they want anyways.  

 

However i'm still new to credit... 


There's a variety of things to consider why some of these requests are generated.

 

The blue bolded statement is really subjective.   These types of [4506-T] requests are typically system-driven based on any number of factors.  This isn't Peggy from Discover using it as punishment or not believing the information an accountholder provided.  This is about mitigating risk on an unsecured [credit card] loan and verifying income. 

 

An item to keep in mind, these requests while infrequent, can be triggered by any number of factors such as discrepancies of reported income versus known income sources, rampant or increased unsecured exposure, unusual transactions or abnormal spend patterns, etc.  Other factors can include, prolonged debt conditions, incremental debt versus reported income combined with things like score deterioration and so on.

 

Typically, if the accountholder has no objection to submitting the request then it just goes through its paces and life goes on.   Optionally, the accountholder can object to the request, but then the account may be subject to either a CLD or closure. 


This.     Plus, I would guess that a substantial number of defaulters do have some reasonable payment history and so have been good  customers for a long time.     Then, stuff happens, e.g. job loss.    Then some obvious things might happen, such as growing balances and missed payments, but issuers may also be looking for more subtle patterns as well.   In any case, then the issuer gets into protection mode, and can CLD,  close or request a 4506-T.    In some sense, this last is the least aggressive form of AA, as the customer has a chance to prove that all is fine and escape unscathed.   Or, as FinStar says, can reject the request and be subject to other forms of AA


This makes sense being the least agressive AA. I would figure in the case of missing payments and defaulting the account will be closed instead of 4506-T. Too many variables I suppose to be subjective here. 

 

I guess a 4506-T could and probably should happen if you say you make 50k year and then suddenly say your income is 150k.

 

Some recent threads here of Discover requesting a 4506-T on a secured card? That seems way overboard since alot of risk is already mitigated. What is the point of a secured card at that point if they going to such lengths to verify income? You already put down a deposit that's your credit limit. 

 

In the light of everything they seem uncommon. 

 

Thanks for the input Smiley Happy 



Currently planning gardening until December 2021 when all HPs drop. Perhaps a bit extreme but want more history before applying again.
Message 34 of 50
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Super Contributor

Re: Discover 4506-T @ random

We have another one. @gramps52 just had his Discover approval revoked for refusing to comply with a 4506-T request for a new account. 

Looks like Disco is cracking down. 



01/2019:
02/2020:

Closed: CareCredit $10K, B&H Payboo $7500
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Message 35 of 50
Valued Contributor

Re: Discover 4506-T @ random

Personally I don't see the problem with complying. Might be a tad inconvientent, but if you want the card you gotta play their game.






Message 36 of 50
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Super Contributor

Re: Discover 4506-T @ random


@Janus wrote:

Personally I don't see the problem with complying. Might be a tad inconvientent, but if you want the card you gotta play their game.


You're not just giving it to them, it tends to go through a third party. In this case, it's Equifax. Equifax has enough info. They already can't secure what they have. 



01/2019:
02/2020:

Closed: CareCredit $10K, B&H Payboo $7500
Hover over my cards to see my limits!
Goal cards: Cash+, Freedom.
Message 37 of 50
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Valued Contributor

Re: Discover 4506-T @ random

True. But the already have more crucial info than income, so 'm not really concerned if someone knows what I make annually. 

 

Seems to me they should go directly to Uncle Sam for tax info though. What's with everyone needing middle men for everything? 






Message 38 of 50
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Community Leader
Senior Contributor

Re: Discover 4506-T @ random

Next thing you know they will be requesting it for CLIs, good thing I never get oneSmiley LOLSmiley LOL


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Message 39 of 50
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Super Contributor

Re: Discover 4506-T @ random


@Janus wrote:

True. But the already have more crucial info than income, so 'm not really concerned if someone knows what I make annually. 

 

Seems to me they should go directly to Uncle Sam for tax info though. What's with everyone needing middle men for everything? 


Maybe I’m not following the intended description, but a 4506-T is an authorization, which allows the holder to go to the IRS to get the tax transcript. 

 

In the case of AMEX the tales seem to indicate AMEX Centurion Bank handles that request and puts the info into the AMEX database, not one of the credit bureaus. 

 

I dont know if that has been stated about Discover, clarifying who is receiving the 4506-T transcript data.  

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Message 40 of 50
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