How would I report my income on a credit application?

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ajst22
 
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How would I report my income on a credit application?

Postby ajst22 » Tue Oct 20, 2015 4:34 pm

So I was planning on getting a new credit card and I don't know how I would report my income. I just got a new job as a home sales consultant selling houses in a community that my company develops. I make a base salary of just $18,000 a year, but I make my real money off commission. I've been here just over a month. Ideally, a target is for me to sell two houses a month, so let's just base it off that, on our lowest price house where I would make my 2% commission. If I do that, in total, my annual income would be $90,000.

How would I report something like this on a credit application? As far as my previous job, I was working hourly at a golf course for two summers which would've worked out at about a $12,000 a year income, so putting that wouldn't obviously be too much, and putting $18,000 a year wouldn't be much better.

As far as my credit goes, I have great credit, but only 1.5 years of credit history. Got my first credit card with a local credit union with a $300 monthly limit (I have been very surprised they never upped it on me), and then my Discover card with a $1,500 monthly limit. The Discover card is about 8 months old. Both are "student" credit cards. I also just got a lease in August and was approved for Toyota's tier 1+ (highest credit tier). I get my TransUnion FICO score with my Discover statement every month, and I'm at 737. It's been at 740ish for several months with no real fluctuation.

Another question would be, given my good (but also limited) credit history, would it most likely end up with me getting approved, but with a low monthly limit if I were to just put $18,000 a year? Thank you all for your responses!


Kevin86475391
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Re: How would I report my income on a credit application?

Postby Kevin86475391 » Wed Oct 21, 2015 8:32 pm

Welcome to the forum!

My number one piece of advice would be to wait a year and see before applying for any new credit. Remember there's no rush and aging up the accounts you already have will benefit you regardless. The reality is that it's difficult-to-impossible to estimate your income in the first year with a job that is primarily commission oriented.

Keep your spending low and sit tight on increasing your credit, and definitely on increasing your lifestyle. Not to be cynical but it's very common for commission-focused jobs to over-hype how much you'll make. They might be saying, "Oh you'll make this if you only sell 2 houses a month" like 2 houses a month is nothing and practically the least you'll sell, but the reality is 2 houses a month may be difficult depending on the market and other circumstances. Sales is tough and it's only to be expected for your company to tell you it's EASY. Don't get in over your head. Just wait and see first hand yourself for a year. Even if you're doing great for 2 or 3 months, that doesn't mean that the next dry spell isn't right around the corner. A lot of businesses are very seasonal. Gather your own data, based on a full year, to reliably estimate your annual income. In the meantime hold off on major purchases and credit decisions.

I did sales-related jobs for a couple of years after college and of course my experience won't necessarily be yours, but for me it was very much feast or famine. Some months I was sitting there blinking at my bank statement like, "WOW, I can't believe how much I made! This is awesome!" other months I was sitting there thinking, "OMG, I've busted my butt and still haven't made enough to cover basic expenses without going into debt." Another factor to bear in mind is that even if you're good at it and doing well, it can be incredibly draining and demoralizing. I was actually better and higher sales than most of my co-workers, but was miserable a lot of the time and consider quitting one of the best decisions I've ever made for my emotional well being.

Seriously, I don't mean to get you down but don't drink the company Kool-aid OR put too much faith in naysayers (like me). Find out for yourself through empirical experience. In the meantime DO NOT over-extend yourself on credit and major purchases. Wait and see.

kdm31091
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Re: How would I report my income on a credit application?

Postby kdm31091 » Thu Oct 22, 2015 5:44 am

I agree with the above. Sit tight for a year, garden, and see how much income you really make. You do not want to get in over your head by adding cards you may not be able to justify later if your income doesn't pan out.

takeshi
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Re: How would I report my income on a credit application?

Postby takeshi » Thu Oct 22, 2015 10:08 am

ajst22 wrote:So I was planning on getting a new credit card and I don't know how I would report my income.

I always advise considering what a creditor would require as evidence in case of a review. AmEx, for example, uses the 4506-T for income verification and will look at 2-3 years of tax transcripts. Other creditors can be more lenient and may be willing to go off of a pay stub or other evidence. It does get trickier with commission income but generally creditors will look at your track record. It's difficult without an established record. It's difficult even with an established record as my wife and I recently had to 'round and 'round with Chase because her income is all commission.

ajst22 wrote:Another question would be, given my good (but also limited) credit history, would it most likely end up with me getting approved, but with a low monthly limit if I were to just put $18,000 a year?

No idea, We're not underwriters and creditors and products have varying underwriting criteria. Your TU FICO 8 from Discover looks pretty good but not all creditors use TU and/or the FICO 8 model.

thom02099
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Re: How would I report my income on a credit application?

Postby thom02099 » Thu Oct 22, 2015 10:22 am

What the others have said.

Look at it this way: would you rather get a less-than-optimal card and low credit limit now, or wait a year (actually 15 months), document a $90K+ income, and get a more desirable card and higher credit limit? And even if you look at a more conservative estimate, say selling one house a month (don't know your market), based on what you've said, that would still be a $45K income...still not shabby.
Retired, and in the process of retiring cards!
EQ = 846 EX=828 TU = 836 as of 02/2016

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Vattené
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Re: How would I report my income on a credit application?

Postby Vattené » Thu Oct 22, 2015 11:50 am

All sound advice above, but I wonder: is there a particular card you're really wanting? If so, you could call the company's customer service and find out directly from the source what they'll accept. If your reasons and expectations are realistic, I see no reason why you should have to wait a year (though it would allow you to provide solid verification of your income).

A related question is do you really need a large credit line right now? A credit line isn't a "monthly limit;" if necessary you can make multiple payments a month to allow you to use the card as you like. Maybe you're just looking to earn decent rewards and want a Citi Double Cash, for example. Just use your base salary to be safest with the knowledge that you can provide evidence if verification is required. Your odds of approval are good and even if you get an initial CL in the low $1,000s it's not that big of a deal. You can use the card and reap the benefits, and it should grow over time as your income (and continued good credit) warrant higher limits. Maybe you're convinced you'll get a lot of value out of a Chase CSP and want to start earning UR right away, for example. A $95 annual fee isn't a big deal but they are issued as Visa Signature cards, which require minimum starting limits of $5,000. Your odds of approval may be more iffy here but still worth a try IMO (all the more reason to speak to a Chase CSR, explain your situation, and see how they'd guide you to report). If you just HAVE to get an Amex Platinum right away because you're definitely going to be making a ton of money and need a card commensurate with your new found status, check yourself.



Edited to Add: I realize I typed "Chase CSP," which is a lot like "ATM Machine" - just trying not to use too much abbreviation/shorthand.
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now



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