How does Income affect Credit Lines

First, welcome aboard. Great place to be if you ask me.

Sad as it is, income is not a huge factor in your initial cards, credit history plays a much larger role. It does have a factor on what CL you may get from CL increases down the road, but because income has a very low effect on credit worthyness, it plays very little role on CL for your initial cards.

Once you have established credit and have some decent cards, your income probably plays a bigger role.

So my advice is this: Don't exaggerate, tell the truth (actually legally you have to). Use your whole household income where possible. And above all do NOT get discouraged as your CL will most likely not be what you expected.

-Peace, Dave

 

Re: How does Income affect Credit L

That's usually the case - however - it seems to vary - depending on the credit card issuers own scoring methods.
in my case - the most extreme instance was between Citibank and First usa. Applied around the same time - Citibank approved me for 4K cl - First USA approved me for 12K.
I wrote the same income amount on both applications, they both checked the same CRA (Experian).
Go figure

 

Re: How does Income affect Credit L

Welcome aboard.

Actually income generally does not factor into a regular credit scores at all. A creditor may have their own requirement of $12,000 or $25,000 or whatever but with the exception of a Diners club or a American Express gold charge card, credit card companies usually don't verify employment information.

The employment information you put down on a credit card application is important in a different way. If you lie and state that you are employed when you are not and later file bankruptcy on that account their is a small chance the lender could make a stink at what is called the meeting of creditors and perhaps, get you bankruptcy thrown out of court.

As far as the amount of income you have, I think this number is fairly subjective because you are not going to have to prove it. Also, this is your income from all sources.

 

Re: How does Income affect Credit L

I agree that you shouldn't lie. But credit card companies seem to make it very easy for people to do so concerning income. I mean say you had some relatives that lived with you for awhile and you added their income as part of household....how would they verify that...if cc's were really interested in income they'd be alot more stringent about income verification.

 

Re: How does Income affect Credit L

I don't think income really comes into the picture. Like Mark LA I had a recent instance where within a couple of weeks I got a 12,000 initial CL from First USA, but got just 2,500 from Fleet (and did not even get the "pre-approved" platinum, just a plain vanilla classic). My issue is that I'm fairly new to the US following a company relocation so my credit history is inevitably short but the Fleet CL amounts to a princely 1% of my income! Guess which card is in the sock drawer.....

 

Re: How does Income affect Credit L

At a previous employer I took applications for a Household revolving line of credit and spent many hours on the phone with the Household underwriters in Vegas trying to get people approved.

Household does pay close attention to the income you put down on the application, although they accept you at your word that it is a true amount. They establish your veracity through automated address verification (which is also matched to a fraud database).

I learned to query customers rather closely about their income, often people have income they don't think about. Regular payments from investments, family members' retirement, etc. are sometimes easy to overlook. Oftentimes I would ask customers about second jobs or additional income after seeing their salary was a little on the low side for the amount we needed and they would say something like, Oh yeah, I detail cars on the weekends. Even a couple of hundred bucks on the additional income line was enough to put them over the top. As long as you're honest, it all counts, even cash side jobs where you don't have a pay stub.

Then there was the customer with a $250,000 monthly income (yes, three million a year!). He was declined by Household due to excessive outstanding credit balances.