Income certainly plays a factor with most lenders when it comes to credit lines. While someone with a 20k income may not be getting $50,000 credit lines left and right, I don't think they're necessarily disadvantaged except that some lenders may assume that the consumer has little or no disposable income. There are also regional differences that have to be taken into consideration. Someone making $85k would probably not have much in the way after basic living essentials in a lot of bigger cities like NYC, Boston, San Francisco, etc. On the other hand, someone making $200k a year in rural Alabama is likely doing quite well but nowhere nmear as well in other areas of the country.
With the Amex 3x CLI, I think someone making $20k isn't going to be hampered too much ifd they started at say $500, and went to $1500 then to $4500. $13,500 could be a stretch on the next one, though. On the other hand, if their starting line were $10k, it's unlikely that Amex would grant a CLI to $30k unless the person making $20k a year also had considerable assets. Good credit can certainly overcome income to an extent, and the same can be said for income - someone who is a marginal risk becomes a much more lucrative candidate with higher income.
@QuakerOatmeal wrote:How much of a factor does income play when it comes to your credit?
Is someone who makes 20k at a disadvantage in the credit game, versus someone who makes 85k?
Would AMEX see that applicant as less favorable than a higher income applicant? Or will they have just as much of a chance for that 3x CLI after 61 days?
Would someone with a good credit score be permanently hamstrung by low credit limits? Or does their good credit counter their income?
1. Really depends on the credit card issuer, and the card itself (minimum limit given.)
2. Not necessarily but each issuer has their own internal limit as to how much credit they will extend you. Income does play a part but so does a good credit history.
3. No idea, just got my first Amex myself. If the 3X requested is more than your annual income, I can see any issuer being leary of that.
4. Maybe, a good credit score can still have items in one's profile a lender simply doesn't like, which might get them a lower limit. Good credit does help, how much it'll counter income is really profile (and lender) specific.
@QuakerOatmeal wrote:How much of a factor does income play when it comes to your credit?
It has no effect on your score, but a big effect on the credit-granting decision.
Is someone who makes 20k at a disadvantage in the credit game, versus someone who makes 85k?
Yes
Would AMEX see that applicant as less favorable than a higher income applicant?
All other things being equal, yes.
Or will they have just as much of a chance for that 3x CLI after 61 days?
No they probably won't.
Would someone with a good credit score be permanently hamstrung by low credit limits?
No one is permanently hamstrung by anything in credit scoring. Time heals all wounds.
Or does their good credit counter their income?
Good credit counts. Income counts too.
There is less wiggle room but if your scores and report support it.. You can get some quite sizable limits even with incomes in the mid 20k range... Know my family member is an example... But also realize this person has a 800+ score... and currently 4 cards.... Amex and Citi both have him at over 10k limits, and BOA is close behind at 8k... While his CU card is still in the minor leagues.... 2K He got a sizable 3x CLI at 91 days instapproved on the Amex originally (BCE if i recall) .. Entirely a PIF after statement kinda person....
Do think time is a factor for even lower income levels...
So yeah theres a slight disadvantage for sky high limits.. but by picking the right cards, using them, and PIF, along with time.. You can get your limits up there... I don't consider a 8-10k or more card shabby at all..
Ymmv
-J
