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How does a creditor know your income when app.for CC?


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It depends on the creditor. Those who report false incomes need to be aware of that. They just may stumble upon one who chooses them for income verification. It doesn't take someone putting down $150K a year to be asked to fax in a copy of a recent paystub. Some CC companies ask for that even w/ a $30K annual income.

IMO, putting down a significantly false income won't benefit a person @ all. (Putting down $50K when you make $40K wouldn't make much of a difference if you're a financially responsible individual.) Telling them that you make $50K when you only make $18K is setting yourself up for a possible BK if you were to ever max out that $1500 limit card w/ a 25%APR. I wouldn't want a $10,000 card when I know that I can only afford $2,000. Everyone is capable of hitting hard times. When applying for credit, one needs to take into consideration that it's very possible that they may have to soley rely on that CC one day. What would happen if they max out that card and can no longer afford to pay the card off? W/ a high interest rate, maxed out card, and only making the minimum payment, one may find him/herself in debt forever...unless/until it's CO. This isn't about morals; it's about being financially wise & knowing what you can manage.

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I would rather have one CC with a high CL than 3 with low CL's...

Only you know what your wallet can handle, hun. Some pple can't manage 3 CCs w/ a $300 CL each but then go out and get a CC w/ a $1500 limit. CC creditors base their decision of credit limits on the average citizen w/in income brackets. They seem to think that most pple in the $20K bracket [for example] can't afford more than a $200 credit limit. Yes, there are the exceptions that manage their $$ quite well. But to play it safe, creditors put those few pple into the same category as those who can't handle higher limits. So, after proving that he/she can pay their bill (more than the minimum payment) on time w/o charging to/above the CL, then the creditor may decide to raise their limit b/c the consumer has proven responsibility.

IOW, I understand creditors' decisions on initial credit limits; but I also understand that there are pple who can afford more although the creditor may think otherwise b/c of their incomes. Therefore, some pple opt to lie on their applications in hopes of getting a higher CL. If that's what a person chooses to do, hey...who am I to care.xangelx Just remember that creditors may ask for proof of the stated income.

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Yup. Depends on how you manage your money, and what your needs are. I have very little outside social life since I started working from home, so I spend practically nothing on "entertainment" besides my cable. I don't smoke, drink, or eat out. I love to cook (I'm a vegetarian), so don't waste money on ordering in. I hate shopping and only do it when I HAVE TO. I have no expensive habits. Since I work from home now, I have no commuting costs anymore (or need for new clothes, heh). I don't own a car, so no payments... or gas. I don't take vacations. I also make a point of saving and/or investing regularly.

Stuff like that makes me able to afford more (if I needed to) than my creditors would otherwise think someone with my income should be able to. So I admit, I do lie on my applications because I know I'm an exception to the accepted rule, but they don't. I don't run up my bills ($50k available credit, less than $1k in debt) and have never paid one bill late in my life. My income--like my age--paints an unrealistic picture of me, so I refuse to be judged by it. But I never lie about my age. ;)

Just my two cents. :D

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You need to get out LNY you live in NEW YORK !! I love that city !!! I'm the same way LNY I live at home by myself and pretty much dedicate my life to my 4,000 kids that I have..No seriously I'm a High School principal. You see I'm off so thats why I am posting as much as I can because when the kids come back I will dissapear from here..xangelx I take good care of my credit yet with no lates but I was a victim of identity theft and I am finally near cleaning up my credit. I do like to shop and I do eat out...But I always pay my bills. I have never lied on and CC app and never will but I was just wondering how they did that... Thanks for your two cents LNY...:)

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You need to get out LNY you live in NEW YORK !! I love that city !!! I'm the same way LNY I live at home by myself and pretty much dedicate my life to my 4,000 kids that I have..No seriously I'm a High School principal. You see I'm off so thats why I am posting as much as I can because when the kids come back I will dissapear from here..xangelx I take good care of my credit yet with no lates but I was a victim of identity theft and I am finally near cleaning up my credit. I do like to shop and I do eat out...But I always pay my bills. I have never lied on and CC app and never will but I was just wondering how they did that... Thanks for your two cents LNY...:)

That's OK, I did more than my fair share of "getting out" in NY when I was younger.;)

I only "lie" on applications because I know my present income makes me look like I can't afford credit card payments. I know I lead a spartan lifestyle, but a creditor will take my income at face value, assume all the expenses people normally have, and decide I don't have any money left over to pay them. So I figure the difference between what I make and what I used to make before... minus all the expenses I don't have anymore since I made that income (like I cut my rent by $500 a month by moving recently, no transportation costs, no lunch costs etc.) and come to a realistic figure between the two.

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Over here in TX where everything is BIG like our Car Payments...We gotta have a car but I can't complain about the cost of living !! I will admit when I was in NY I missed the grass and trees of TX but NY just blows me away...I love that place... Merry Christmas Spartan....:)

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I agree EA but I have CC's with small CL's and I was guessing because of my salary which is actually good. I would rather have one CC with a high CL than 3 with low CL's...Great Post Earth Angel...:)

I don't know if there is an easy formula. Back in the 90s, I had 3 credit cards with CLs totaling more than $15K, with an income less than $20K. My girlfriend has a Chase Amazon with a $17K limit and her income is $40K, though her credit is perfect.

I always wondered if reporting a higher income would adversely affect a credit decision, ie. "If this person has a $70K income, why does he still have unpaid collections? Something's fishy" -- 'reject button'...

Capital One Auto required that I prove my income. I reported $60K, figuring the next 12 months, not the last 12 months, as I've gained about $2K per year in COLA raises over the last 8 months and I'll get a $5K per year raise in June. They approved me for $30K, 50% of income, even though my paystubs show that I'll have only made about $56K these last 12 months. So, they didn't change their decision when I was missing $4K for this past year.

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It depends on the creditor. Those who report false incomes need to be aware of that. They just may stumble upon one who chooses them for income verification. It doesn't take someone putting down $150K a year to be asked to fax in a copy of a recent paystub. Some CC companies ask for that even w/ a $30K annual income.

IMO, putting down a significantly false income won't benefit a person @ all. (Putting down $50K when you make $40K wouldn't make much of a difference if you're a financially responsible individual.) Telling them that you make $50K when you only make $18K is setting yourself up for a possible BK if you were to ever max out that $1500 limit card w/ a 25%APR. I wouldn't want a $10,000 card when I know that I can only afford $2,000. Everyone is capable of hitting hard times. When applying for credit, one needs to take into consideration that it's very possible that they may have to soley rely on that CC one day. What would happen if they max out that card and can no longer afford to pay the card off? W/ a high interest rate, maxed out card, and only making the minimum payment, one may find him/herself in debt forever...unless/until it's CO. This isn't about morals; it's about being financially wise & knowing what you can manage.

A persons credit report can give a lot of imformation in regards to verifying income.. Size of mortgage, home equity loans, auto loans and other credit cards , ect.. You can refuse to put your income on your applications, but a credit analyst if they are able to approve you can give you a credit line based on your credit report..

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It depends on the creditor. Those who report false incomes need to be aware of that. They just may stumble upon one who chooses them for income verification. It doesn't take someone putting down $150K a year to be asked to fax in a copy of a recent paystub. Some CC companies ask for that even w/ a $30K annual income.

IMO, putting down a significantly false income won't benefit a person @ all. (Putting down $50K when you make $40K wouldn't make much of a difference if you're a financially responsible individual.) Telling them that you make $50K when you only make $18K is setting yourself up for a possible BK if you were to ever max out that $1500 limit card w/ a 25%APR. I wouldn't want a $10,000 card when I know that I can only afford $2,000. Everyone is capable of hitting hard times. When applying for credit, one needs to take into consideration that it's very possible that they may have to soley rely on that CC one day. What would happen if they max out that card and can no longer afford to pay the card off? W/ a high interest rate, maxed out card, and only making the minimum payment, one may find him/herself in debt forever...unless/until it's CO. This isn't about morals; it's about being financially wise & knowing what you can manage.

Not to mention that's fraud. Can't someone go to jail for lying about their income or saying they are employed to get credit when their not and then not paying the debt? I think it's extra fraud when it's discharged in bankruptcy.

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I don't know if there is an easy formula. Back in the 90s, I had 3 credit cards with CLs totaling more than $15K, with an income less than $20K. My girlfriend has a Chase Amazon with a $17K limit and her income is $40K, though her credit is perfect.

I always wondered if reporting a higher income would adversely affect a credit decision, ie. "If this person has a $70K income, why does he still have unpaid collections? Something's fishy" -- 'reject button'...

Capital One Auto required that I prove my income. I reported $60K, figuring the next 12 months, not the last 12 months, as I've gained about $2K per year in COLA raises over the last 8 months and I'll get a $5K per year raise in June. They approved me for $30K, 50% of income, even though my paystubs show that I'll have only made about $56K these last 12 months. So, they didn't change their decision when I was missing $4K for this past year.

Why is it collectors are less likely to sue for really large debts? My brotherinlaw had a charged off credit card for $30,000 and I can't believe no one took him to court. It's now past the SOL and falls off his report in two weeks. Lucky bastard. LOL I thought one cc company was going to hunt me down and set me on fire for $3000.

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