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Updating income with Credit Cards Questions

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Regular Contributor

Updating income with Credit Cards Questions

I have been trying to find an answer to these questions and from everything that I have read on these forums, there are no specific answers. I am hoping that one of the MyFico experts can chime in :-)
Last year, I got married and we are getting ready to file taxes together. My income when I applied for the accounts that I have (Capital One, Discover Secured, Wayfair, Toyota, and Overstock) was $37k. With getting married, our joint income is now over $100k.
My questions:
Do I update our joint income with the credit cards?
If I do, with that big of a jump, will it freak them out?
If they ask for income verification- do I just send them a copy of our tax returns or W2s or what?

I don't want to spook any Cc's, but after my Ch7 last year, I am hoping to get some CL luv at some point this year. My highest CL is Toyota at $1,500.

Thanks in advance for any of your wisdom!
Chapter 7 DC 10/23/18
Starting FICO 8 11/22/18

Current FICO 8 9/28/20

GOAL 680 by 12/20
Current FICO 9 7/28/20

Student loans and car payments reporting positive



Message 1 of 24
23 REPLIES 23
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Senior Contributor

Re: Updating income with Credit Cards Questions


@Kathyups wrote:
I have been trying to find an answer to these questions and from everything that I have read on these forums, there are no specific answers. I am hoping that one of the MyFico experts can chime in :-)
Last year, I got married and we are getting ready to file taxes together. My income when I applied for the accounts that I have (Capital One, Discover Secured, Wayfair, Toyota, and Overstock) was $37k. With getting married, our joint income is now over $100k.
My questions:
Do I update our joint income with the credit cards?
If I do, with that big of a jump, will it freak them out?
If they ask for income verification- do I just send them a copy of our tax returns or W2s or what?

I don't want to spook any Cc's, but after my Ch7 last year, I am hoping to get some CL luv at some point this year. My highest CL is Toyota at $1,500.

Thanks in advance for any of your wisdom!

1. Yes; you are allowed to update your income to include any that you have "a reasonable expectation of access."  Unless there are specific reasons why you don't commingle income and assets, it is assumed that you have access to your spouse's income and vice versa.

 

2.  No.  Lenders are aware that people change jobs, get raises, get married, etc.  If they have questions they will likely ask for proof of income which shouldn't be a problem if you're not overstating your income.

 

3.  It depends on the lender.  Some are satisfied with two recent paystubs; others like American Express will demand a Form 4506-T which permits them to acquire copies your tax returns directly from the IRS.





Message 2 of 24
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Community Leader
Super Contributor

Re: Updating income with Credit Cards Questions


@MaizeandBlue wrote:

@Kathyups wrote:
I have been trying to find an answer to these questions and from everything that I have read on these forums, there are no specific answers. I am hoping that one of the MyFico experts can chime in :-)
Last year, I got married and we are getting ready to file taxes together. My income when I applied for the accounts that I have (Capital One, Discover Secured, Wayfair, Toyota, and Overstock) was $37k. With getting married, our joint income is now over $100k.
My questions:
Do I update our joint income with the credit cards?
If I do, with that big of a jump, will it freak them out?
If they ask for income verification- do I just send them a copy of our tax returns or W2s or what?

I don't want to spook any Cc's, but after my Ch7 last year, I am hoping to get some CL luv at some point this year. My highest CL is Toyota at $1,500.

Thanks in advance for any of your wisdom!

1. Yes; you are allowed to update your income to include any that you have "a reasonable expectation of access."  Unless there are specific reasons why you don't commingle income and assets, it is assumed that you have access to your spouse's income and vice versa.

 

2.  No.  Lenders are aware that people change jobs, get raises, get married, etc.  If they have questions they will likely ask for proof of income which shouldn't be a problem if you're not overstating your income.

 

3.  It depends on the lender.  Some are satisfied with two recent paystubs; others like American Express will demand a Form 4506-T which permits them to acquire copies your tax returns directly from the IRS.


I will add to this that some lenders only ask for the individual's income when filling out a credit card application. I've only found this on some CU applications so it does not happen very often. I would just make sure to read and if does not specify just your own income then feel free to add your spouse's as well.

2020 is like a steak cooked well-done that needs to get out of my face. - @imapharmacygirl
Message 3 of 24
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Senior Contributor

Re: Updating income with Credit Cards Questions


@simplynoir wrote:

@MaizeandBlue wrote:

@Kathyups wrote:
I have been trying to find an answer to these questions and from everything that I have read on these forums, there are no specific answers. I am hoping that one of the MyFico experts can chime in :-)
Last year, I got married and we are getting ready to file taxes together. My income when I applied for the accounts that I have (Capital One, Discover Secured, Wayfair, Toyota, and Overstock) was $37k. With getting married, our joint income is now over $100k.
My questions:
Do I update our joint income with the credit cards?
If I do, with that big of a jump, will it freak them out?
If they ask for income verification- do I just send them a copy of our tax returns or W2s or what?

I don't want to spook any Cc's, but after my Ch7 last year, I am hoping to get some CL luv at some point this year. My highest CL is Toyota at $1,500.

Thanks in advance for any of your wisdom!

1. Yes; you are allowed to update your income to include any that you have "a reasonable expectation of access."  Unless there are specific reasons why you don't commingle income and assets, it is assumed that you have access to your spouse's income and vice versa.

 

2.  No.  Lenders are aware that people change jobs, get raises, get married, etc.  If they have questions they will likely ask for proof of income which shouldn't be a problem if you're not overstating your income.

 

3.  It depends on the lender.  Some are satisfied with two recent paystubs; others like American Express will demand a Form 4506-T which permits them to acquire copies your tax returns directly from the IRS.


I will add to this that some lenders only ask for the individual's income when filling out a credit card application. I've only found this on some CU applications so it does not happen very often. I would just make sure to read and if does not specify just your own income then feel free to add your spouse's as well.



Correct, since credit unions are membership-based financial institutions they can only consider the income of an individual member.  But when both spouses/partners are members they will allow combined incomes.





Message 4 of 24
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Community Leader
Super Contributor

Re: Updating income with Credit Cards Questions


@MaizeandBlue wrote:

Correct, since credit unions are membership-based financial institutions they can only consider the income of an individual member.  But when both spouses are members they will allow you to combine incomes.


I did not know that. Is this the general rule of thumb or is it on a case-by-case basis?

2020 is like a steak cooked well-done that needs to get out of my face. - @imapharmacygirl
Message 5 of 24
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Regular Contributor

Re: Updating income with Credit Cards Questions

Thank you so much for your responses! I really appreciate it. I love this forum and its members are so helpful!!
Chapter 7 DC 10/23/18
Starting FICO 8 11/22/18

Current FICO 8 9/28/20

GOAL 680 by 12/20
Current FICO 9 7/28/20

Student loans and car payments reporting positive



Message 6 of 24
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Senior Contributor

Re: Updating income with Credit Cards Questions


@simplynoir wrote:

@MaizeandBlue wrote:

Correct, since credit unions are membership-based financial institutions they can only consider the income of an individual member.  But when both spouses are members they will allow you to combine incomes.


I did not know that. Is this the general rule of thumb or is it on a case-by-case basis?


 

I guess I should not have made such a generalized statement but that was my experience with a local credit union early on in my rebuild.  They insisted on my wife joining and adding her income in order for me to be considered for credit products.  I live in a community property state so perhaps that had something to do with it, but from my viewpoint it shouldn't really matter as long as they informed her of the new credit account. She declined to join and I ended up with two TU hard pulls with nothing to show for them and ended up closing my membership shortly after.





Message 7 of 24
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Super Contributor

Re: Updating income with Credit Cards Questions

If you’re worried about raising red flags but you want a CLI, just tell them a portion of the income increase. You aren’t required to disclose all income to them, only income that you expect to have considered towards payment of the debt. 




Message 8 of 24
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Senior Contributor

Re: Updating income with Credit Cards Questions

The CARD Act (2009) imposed the requirement that financial institutions consider a borrower's "ability to pay" when evaluating a credit application and deciding on credit limits. That "ability to pay" is determined by your reported income and its the reason why lenders will periodically ask you to update your income. You would be doing yourself a disservice by deliberately understating your income.





Message 9 of 24
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Super Contributor

Re: Updating income with Credit Cards Questions


@MaizeandBlue wrote:

The CARD Act (2009) imposed the requirement that financial institutions consider a borrower's "ability to pay" when evaluating a credit application and deciding on credit limits. That "ability to pay" is determined by your reported income and its the reason why lenders will periodically ask you to update your income. You would be doing yourself a disservice by deliberately understating your income.


Not if you don’t want to fork over tax documents and you’re dealing with a lender known to request them, like Amex and Citi. A huge increase in income reported is highly likely to trigger a review and if you don’t send off the tax paperwork, you can lose the lines you already have. 




Message 10 of 24
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