Income estimate based on size of credit limits?

[MidnightVoice]

From the artocle -

In the past, the companies relied on self-reported income information. But lenders already are starting to use Experian PLC's Income Insight product to verify what individuals report, says Brannan Johnston, vice president, income and deposits for the Costa Mesa, Calif., credit bureau.

Experian came up with its estimates by matching credit reports against a deep database of wages and interest and investment income and determining what information about the number of accounts, total credit, payments and other factors best predicted income.

Mr. Johnston says the income estimates also may be used to decide whether to increase a credit limit, since information on credit-card accounts may not be available or up-to-date. In addition, collection agencies have been interested in using the data to determine the most profitable accounts to pursue.

[Anonymous]

Issuers have always understood and worked the law of large numbers to their advantage and will continue to do so. Even this FRB regulation is a compromise headed in that direction. (Retailer says, "Don't mess with my ability to extent instant credit at checkout," and they get a reg to suit them.) Since the larger banking institutions want to play that way and it is very expensive for the smaller institutions to do otherwise I foresee a situation where they all subscribe to one of these "services" and there is actually little impact on individuals.

[score_building]

Hmmm, I received this email yesterday...kinda makes me think TU may've developed this new product, in part, as a sneaky way to try to get a better handle on individuals' finances

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[Anonymous]

There had to be a reason why I have avoided using one of these programs where you have consolidated access to all your account information. Now I know what that reason is.

[Anonymous]

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@Anonymous wrote:
There had to be a reason why I have avoided using one of these programs where you have consolidated access to all your account information. Now I know what that reason is.

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+1

[Anonymous]

Then there is also the matter of household income versus individual income...

[DI]

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@Anonymous wrote:
Then there is also the matter of household income versus individual income...

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Also people make money on the side from different sources that aren't taxed.  

[Anonymous]

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@DI wrote:

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@Anonymous wrote:
Then there is also the matter of household income versus individual income...

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Also people make money on the side from different sources that aren't taxed.  

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LOL. 

Only if they commit tax fraud.  Legally, all income is taxable.  If you have an increase or income, from any source, unless it is from "tax free" bonds or life insurance proceeds, etc., then you are supposed to declare the income and pay the appropriate tax.  Even "tax free" sources must be declared and then shown to be exempt properly.  There isn't a case where money can come in and not be declared (I'm not talking about $10 or small amounts....I'm talking about "income" as related to a source of income and taxes.)

Granted, many people don't declare "on the side" or cash income that isn't "traceable."  But I don't think it wise to advise or suggest that tax evasion is ever a good idea.

 

Message Edited by txjohn on 01-14-2010 10:11 AM

[DI]

I can't imagine little Johnny having to pay taxes on his earnings for cutting grass or shoveling snow. 

[Anonymous]

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@DI wrote:
I can't imagine little Johnny having to pay taxes on his earnings for cutting grass or shoveling snow. 

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Hopefully "Little Johnny" isn't applying for credit cards!

LOL.  I was speaking to individuals of majority age and legal to enter into contracts, such as an application for credit.

However, Little Johnny is liable for taxes if the amount is beyond exemptions.  So if his raking/shoveling business makes a lot, then yes he must pay taxes, just like Miley Cyrus, Brittany (younger years) or any other child with substantial income.