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It was awkward to say the least: I was standing at the cash register when the clerk asked me how much money I make. Normally that’s not a question I’d answer for a complete stranger, but I was applying for a department store card and she had to key in a number. I told her, and minutes later, I had the card, which led me to wonder, do they verify that information at all?

As a result of the CARD Act of 2009, issuers are required to assess an applicant’s ability to repay the debt. Yet, income data isn’t a part of standard credit reports, so how do they do that? There are a variety of ways issuers can approach it, says Brannan Johnston, vice president, Consumer Information Services, at Experian.

Stated Income

Most issuers rely on the income that applicants state on their credit card applications. But that doesn’t mean you can make up anything you want. First, you don’t want to set off alarm bells by stating income you don’t receive. “It has to be reasonable,” says James K. Simon, Jr., senior vice president and chief lending officer for TCM Bank, N.A., and must make sense in the context of the borrower’s employment and financial situation. Fortunately, issuers typically allow you to count a wide range of sources of income, including your spouse’s income if it’s available to pay your debt, as well as income from investments, pensions, Social Security benefits, etc.

The other reason you don’t want to pull a figure out of thin air: It’s illegal to provide false information on a credit application. Though rare, there are situations where consumers have been prosecuted for lying on credit card applications. So don’t put down a six-figure salary if you don’t earn one.

Income Models

These models estimate monthly income based on a variety of factors, including credit report data. “If you have a mortgage with a certain monthly payment and an auto loan with a certain monthly payment and you make those on time it’s reasonable to assume you have an income of XX,” says Johnston. In other words, the model can infer how much you likely make based on payments you make toward your debt each month. Lenders can purchase them from credit reporting agencies such as Experian, similar to the way they purchase credit scores.

Income Verification

When full-blown income verification is needed, lenders can ask applicants to authorize the lender to obtain their tax return data directly from the IRS. Again, the lender may use a service such as the one Experian provides to process this request. “Full checks tend to be expensive,” says Johnston, “so it would only make financial sense to do for very significant lines of credit.” Applying for a mortgage is an example of a situation where the lender may request tax return data.

Of course, lenders can always request proof of income such as pay stubs from the borrower, but again, that’s more likely to happen in the context of an auto loan or mortgage. It’s time-consuming and costly to have employees verify that information, and even pay stubs can be forged fairly easily.

At least as it stands today, most card issuers will rely on the figure you provide in the “income” field when you apply for a credit card. What they do verify, however, is your credit score. (It’s a good reason to check your credit scores, which you can do for free.) They know that all the income in the world won’t matter if you don’t pay your bills. So they want to see a good credit score, which demonstrates a track record of paying bills on time. And that’s something you can’t fudge.

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