Has anyone lied about income and/or savings on application

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charged
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Has anyone lied about income and/or savings on application

Postby charged » Sun Aug 14, 2016 12:25 am

I didn't do this. I'm glad I didn't because I still got approved for credit lines that were more than sufficient when I was honest about my income and savings. However, they didn't ask me for any sort of verification. So if I had said that I make 250k a year and have half a million in the back would I get an insane credit limit without any consequences for lying?


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CarefulBuilder14
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Re: Has anyone lied about income and/or savings on application

Postby CarefulBuilder14 » Sun Aug 14, 2016 10:04 pm

charged wrote:I didn't do this. I'm glad I didn't because I still got approved for credit lines that were more than sufficient when I was honest about my income and savings. However, they didn't ask me for any sort of verification. So if I had said that I make 250k a year and have half a million in the back would I get an insane credit limit without any consequences for lying?

Possibly - but it can also backfire on you.

Most banks seem much more interested in income than assets. Amex is generally interested in both.

Many things can potentially trigger a bank to suddenly want proof of income - not just asking for a CLI.
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Re: Has anyone lied about income and/or savings on application

Postby TXviking » Sun Aug 14, 2016 11:15 pm

CarefulBuilder14 wrote:
charged wrote:I didn't do this. I'm glad I didn't because I still got approved for credit lines that were more than sufficient when I was honest about my income and savings. However, they didn't ask me for any sort of verification. So if I had said that I make 250k a year and have half a million in the back would I get an insane credit limit without any consequences for lying?

Possibly - but it can also backfire on you.

Most banks seem much more interested in income than assets. Amex is generally interested in both.

Many things can potentially trigger a bank to suddenly want proof of income - not just asking for a CLI.


Now I'm curious -- what kinds of things? From time to time, my creditors ask me to "update" my income info and they often ask during a CLI request. But I've never been asked for assets, even by AmEx, and I've never once had a creditor demand proof (sole exception: Mortgage, but that's standard procedure with mortgage applications.)

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Re: Has anyone lied about income and/or savings on application

Postby augiedog » Sun Aug 14, 2016 11:40 pm

This is normally verified by how much you have reported to other creditors, as well as past usage of spending and credit line usage. Your credit report has all of your loans and credit cards from the last seven years, and give some indication of your ability to spend and pay your balances. Hence why it's favorable to have a credit utilization between 10%-30%; You're likely to get a CL that lets you access about that 10-30% of you income that you're expected to make based on how much money you have spent and your ability to pay it back. Generally, if you are deemed responsible enough, you will get more access to your yearly income as a higher credit line (which is the main reason you have gained a sufficiently large credit line).

In a nutshell, you need a credit history that indicates you can access all the money you say you will earn or have as assets. Otherwise they would have questioned your income since it does not seem plausible you make that much.
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Re: Has anyone lied about income and/or savings on application

Postby TXviking » Mon Aug 15, 2016 7:47 am

The link between annual income appears to be tenuous. My limits right now are generally between 10-25% or so of my annual income, but back before the Great Recession, industry consolidation, looser regulation of the credit card industry etc, they used to be much higher — even though I made much less back then. At one point I had several cards that each had credit lines higher than my annual income.

The credit lines I have now are more than sufficient. Back in the day, I suspect credit lines were determined by the same crazy math the sub-prime mortgage industry used. :rolleyes:

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Re: Has anyone lied about income and/or savings on application

Postby takeshi » Mon Aug 15, 2016 7:48 am

charged wrote:So if I had said that I make 250k a year and have half a million in the back would I get an insane credit limit without any consequences for lying?

Just because you didn't encounter income verification when applying doesn't mean that you'll never encounter it. It can happen down the road as well. Always consider the evidence that you'll have to submit to a give creditor if you run into income verification. Income is only part of the consideration for credit limit. Your credit profile matters as well. High income by itself isn't going to guarantee high limits. There are plenty with high income and poor credit that aren't able to qualify.

TXviking wrote:Now I'm curious -- what kinds of things?

Activity, including activity by AU's is just one example.

TXviking wrote:The link between annual income appears to be tenuous. My limits right now are generally between 10-25% or so of my annual income,

Again, it's not just about income. I'm not sure that specific limits versus income is a useful metric. The total limits with a given creditor will give a better idea of what each creditor is willing to extend to one based on income and credit profile. Of course, there are those who end up hitting max exposure with a given creditor so they cannot get more granted even with a better credit profile and/or income. I've run into it myself with USAA which has a max exposure of 50K, for example. I know I've also hit my internal limit with Chase with total limits with them at about 54% of my income. I haven't pushed it with AmEx but I'm at 38% with them.

TXviking wrote:but back before the Great Recession, industry consolidation, looser regulation of the credit card industry etc, they used to be much higher — even though I made much less back then. At one point I had several cards that each had credit lines higher than my annual income.

That has an impact as well but that affects everyone. A given creditor may tighten or loosen underwriting criteria as well for business reasons, impacting what limits people can qualify for.

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Re: Has anyone lied about income and/or savings on application

Postby TXviking » Mon Aug 15, 2016 10:05 am

It may not be all about income, but the other information a creditor has is limited to what they can glean from your credit report. I'm sure they compute an income-to-debt ratio, for example. But that metric also was worse for me back i the day -- college student income meant very little money left over after expenses. I can't think of a single financial health metric that was better for me personally then compared to now, and yet my limits "then" were borderline insane.

I'm chalking the change up to more responsible lending after the larger shakeup in the banking industry. And I believe it's actually a good thing — even now, lenders give irresponsible consumers plenty of rope with which to hang themselves, but it used to be way worse.
Last edited by TXviking on Mon Nov 28, 2016 12:29 am, edited 1 time in total.

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Re: Has anyone lied about income and/or savings on application

Postby CarefulBuilder14 » Mon Aug 15, 2016 10:54 am

"Things" would include anything that might make a lender consider taking AA.

It can even be due to macroeconomic concerns.
Love: IHG, Platinum, Sallie Mae, AA Plat, CSP
Like: Discover, ED, BCE, Hyatt, Arrival, Freedom
Might drop: BrooksBros, Prestige (Costco PC?)
Might add: Proper business card, CSR, Ritz, Delta Gold
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TyE
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Re: Has anyone lied about income and/or savings on application

Postby TyE » Tue Aug 30, 2016 8:16 pm

A lot of people embellish the amount they make in credit card applications and credit card companies know this. When they look into your credit report and see what kind of debt ratio you have on your current lines, that will give them a better idea of how truthful you are about the income you stated. If in reality you make $50k but you say you make $200k and the representative looks at your credit profile and sees you having multiple lines with a credit utilization over 50% on all of them, they will probably call you on it and decline you. My advise is to be honest, it will usually set you free.....

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Re: Has anyone lied about income and/or savings on application

Postby MemberSince99 » Wed Aug 31, 2016 7:11 am

Please keep in mind that this is unlikely but they can prosecute you for fraud for this.

It isn't likely but why risk it.

What is a lot more likely is adverse action.



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