How do banks know your income?

[ficoChanger]

A few months ago I applied for another credit card at my bank.  A few weeks later I got a letter saying that the amount of available credit was decreased so that it was in line with my income.  I know that this is quite common.  My question is, how does a bank (in this case BofA) know your income?  My income has changed over the years so I want to make sure that my bank makes decisions off my current income and not something reported five years ago.

[Anonymous]

I would assume they may be checking your deposits (if you use them for a checking / savings as well).  Then again, a lot of people nowadays split their pay between accounts.

[ficoChanger]

That doesn't seem right.  I don't think you can deduce someone's income by how much they deposit into a particular account.  If that is the case then BofA would think that I have zero income since I deposit my paychecks at another bank.

[Creditaddict]

Bank of America is acting like American Express did a year-two years ago... just find a better bank, the way they are treating there customers they deserve to go BK.

[nothingman02]

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@ficoChanger wrote:
A few months ago I applied for another credit card at my bank.  A few weeks later I got a letter saying that the amount of available credit was decreased so that it was in line with my income.  I know that this is quite common.  My question is, how does a bank (in this case BofA) know your income?  My income has changed over the years so I want to make sure that my bank makes decisions off my current income and not something reported five years ago.

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They'll get that from you when you app ey?

I believe theres no particular way that they'd know (legally) about your income unless you tell them.

You could call and let them know your current income.

[Anonymous]

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@ficoChanger wrote:
A few months ago I applied for another credit card at my bank.  A few weeks later I got a letter saying that the amount of available credit was decreased so that it was in line with my income.  I know that this is quite common.  My question is, how does a bank (in this case BofA) know your income?  My income has changed over the years so I want to make sure that my bank makes decisions off my current income and not something reported five years ago.

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Didn't BoA ask what your income was when you applied for credit?  Generally most applications ask what your personal or household income is.

[ficoChanger]

They might have asked me when I applied for my first card, but that was several years ago when I was making much less.  When I applied for a second card recently, I was just in a branch office doing some banking.  I asked if I could apply for an AMEX card and they said sure and handled the paperwork for me.  I don't think they asked me about my income.  So if they are using my income information from a few years ago then they will be way off.  I will go to my local branch and make sure they have my correct information before I attempt any type of CLI online.

[creditwherecreditisdue]

Four standard questions on every computer entered BofA credit application and CLI request:

     1) Occupation,

     2) Salary,

     3) Housing Payment, and

     4) Other income.

(I saved a screenshot of my last CLI request.) 

[bakalao2k]

Not only can your bank figure out what your income is, but starting in February credit bureaus like EQ, EX and TU may use your estimated income to determine your credit worthiness when you apply for new credit cards.

http://articles.moneycentral.msn.com/Banking/YourCreditRating/look-who-is-peeking-at-your-paycheck.aspx

[creditwherecreditisdue]

They may use (and do use) such estimates right now. They must consider your ability to pay (which could include estimates of income or assets) after 22FEB2010.