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First off, I need a prepaid Discover Card can anyone help me? Hoping for any comment. My other question... Credit card companies have three choices under the carda:. |
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I would like to know the answer too. Anyone here know what is the right answer. I'll do some research and get back to you if I find an anything. You should email the people at Discover Card as they probably can help you..
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The rules are changing fast in this game, people. Those who adapt will be fine; those who refuse to accept the reality that things are different now will be left behind..
A confluence of factors, including billions of dollars in credit losses, the collapse of the CDO market, a government trying to protect people from themselves, high unemployment, new consumer spending patterns, etc., have all forced lenders to change the way they do business in an attempt to increase profits while decreasing risk as they negotiate the minefield of new laws, rules and regulations.. This pseudo income verification is just one of many factors that have and will change. In fact, I doubt it will be long before a chcek box appears on the bottom of credit apps that authorizes a 4506-T before processing... |
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What we call "progress" is really the exchange of one nuisance for another nuisance..
-Havelock Ellis.. |
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Before it gets repeated enough to become a "fact" please note that Reg. Z does NOT require income VERIFICATION. It only requires income and/or assets be considered and allows either to be stated (not verified) or some statistically validated proxy which would not even require a consumer to state income..
Arguably, Discover card issuers should go beyond this to protect themselves - and us from APR jacks due to their imprudence issuing CCs. However Reg. Z's actual requirements are pretty mild.. An income proxy from CRAs would be much like a FICO "score" as it is something statistically derived from the CRA's data much like FICO's "Capacity Index" or Insurance score and purchased by the Discover credit card issuer. It is not something that is part of the CRA's report... |
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Who said it required income verification? these rules give card issuers at least three options to comply with the CCARDA..
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You reported it accurately. Some other posters have been referring to "income verification" but not you, heg...
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No worries. You make a good point about not letting this become the conventional wisdom...
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Why is it difficult than non for self-employed person, if it is done by checking tax returns?.
If you are talking about, what exactly were you paid a few months ago, may be.. The bureaus already have some spending numbers. The balances on the tradelines are reported the same whether one is self-employed or not.. This post has been edited by credit_help: 13 January 2010 - 04:22 PM.. |
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AS FAR AS ACCURATE GOES...THEY WOULDN'T KNOW WHAT 100% ACCURATE WAS IF IT BIT THEM IN THE BUTT.
(me) WHOSE ACCOUNT>UNKNOWN. Please change to WHOSE ACCOUNT>JOINT. FRIVOLOUS...REAMAINS.. |
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The models are probably as accurate (or more accurate) than self-reported income.....
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Everybody at my store makes minimum wage (so say the un-educated WALMART HATERS MANTRA SAYS).
When my Discover card companies get that information ALL my cards will be cut to $200 or closed totally.. |
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My base salary is public knowledge and posted on my employer's website..
I don't see what the big deal is... |
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My wife is a perfect example. If you add up the minimum payments reporting on her credit reports it will amount to more than she makes. She has NEVER missed a payment or been late on ANYTHING...
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+1.
And to the poserabout 5 post down: e must file a class-action lawsuit... |
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Issuers don't have to reject (or approve) anyone based on CRA or other income models. that is not what the CCARDA says...
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If you find my posts so offensive that you need to post a response like this may I suggest you place me on your ignore list since you clearly do not appreciate substantive responses to your posts...
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Attacking me for pointing out the erroneous conclusion you reached is apropos for you...
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Attacking you? Sir, I think you're confused. At this point I have no idea what you're talking about so I'm just going to let you *think* whatever it is that you think...
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Slightly off topic, but why does this things name keep getting longer every other post? CARD->CARDA->CCARDA.
Bureaucracy in action?.. |
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Discover card Accountability, Responsibility, and Disclosure Act of 2009.
Ipso fatso. CCARDA.. |
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I've gradually become aware of the ipso facto name by watching your reference to it grow post by post.
Shouldn't it be CCARaDA'09?.. |
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LOL.. I know I accidentally spelled it right.
This post has been edited by clutchcargo: 13 January 2010 - 09:06 PM.. |
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I believe that IS where I heard that before. Thanks for the time travel!..
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Good.. maybe this will force people to not get cards/lines they can't afford..
All credit cards should be verified against income and up-to-date usage of other lines. Not what was reported a month or more ago... |
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PART IN RED<.
I use the 10% rule. Give me $50,000 I can use up to $5,000. Give me $1,000 I can use up to $100. Give me $200 I can use up to $20. REALLY HARD TO SPEND OVER $1,000 PER MONTH WITH A $100 USE CARD (or even worse...a $20 card). YOU PAID THE BILL...HOW DID THE BANK LOSE???. This post has been edited by GEORGE: 13 January 2010 - 09:44 PM.. |
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It's an effing stupid system....
Why should there be a 10% rule, or a 28% rule, or a 50% rule?. If the bank gives me a line of credit for $5,000 I should be able to use 100% of that. That line of credit should be based on my disposable income after taxes, mortgage payment, installment loans, and a reasonable amount of money for utilities, food, etc. Over time I should be able to extend myself a bit more if the need be. I.E. if you have the same job for 2 weeks and never had a card, you won't be getting a very big limit. Once you use it, pay it, use it pay it, and establish some cred. Plain and simple.. But, nobody in America will ever allow that to fly. Just look at how fat everyone else, and the shit food they eat compared to other places in this world.. It's so amusing to see all the games and hoops people jump through.. Here's something to laugh at. I think PFD should be _ILLEGAL_ to the fullest extent of the law. But then again, I think you should have one physical card that can be attached to many investors.. and for those lucky people who do pay their bills on time, I think that when you make a charge.. the companies should be able to bid down the interest rate for that charge based on 1) amount and 2) your profile. Sort of like Prosper, but a real system not some sham website... |
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Banks get NERVOUS when you get over 30%.
SUPER NERVOUS when you go over 50%. They POP A BLOOD VESSEL when you get over 90%. I should be able to use $9,999.99 of a $10,000 credit limit...but they often won't let you.. |
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You think someone who is extending you unsecured credit is invading your privacy wanting to know how much money you make?..
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You people don't even know the real downside to this..
Guess who sees credit reports all the time that has no business looking at credit reports.. Employers.. So guess what it is going to be like haggling for a future salary with a future employer when they can see about where you were making in the past. You will no longer have any leverage trying to find a new job that pays a much higher salary because you never held one that high in the pastso why should a future employer offer it to you?. Guess how many companies will start requiring HR departments to look at this number and write down offer letters so they come within X% of what the prospect is showing on their Income "Guesstimate"?.. |
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I have no problem with my creditors current and future seeing our income since I'm going to tell them on the app, but the majority in our situation don't make the amount of $$$ that we do. Since they've already admitted that there WILL be errors and that they will be using averaging models that could be really bad. If I say we make $80k and the report says $30k, that'll cause problems and headaches I could do without...
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...AND IF YOU SAY YOU MAKE $50,000 PER YEAR AND ALREADY HAVE SPENT AND PAID OFF $127,000.
01/01>06/30 DID THEY LOSE ANYTHING???. This post has been edited by GEORGE: 13 January 2010 - 11:43 PM.. |
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JUST GIVE EVERYBODY $200>$1,000.
PROBLEM SOLVED. (although the bank will lose $100,000,000's) BECAUSE OF THE RESTRICTION OF THE CREDIT LIMIT(s).. |
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I said UNTIL THEN, it's my personal private information. I very clearly stated if income is needed as part of a credit application, I have no problem proving it or providing documentation of it. However, I think creditors pre-screening me should not be able to see this. And what about collections agencies that pull someone's report? What happens when the credit bureaus say someone makes a certain amount, so the collections agencies knows what NOT to settle for? Or when they won't settle even though the estimated income is wrong? Yes, it is my private information. But I never said anything to the effect of "my creditors shouldn't know how much money I make." I suggest you read the entire post again...
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So in other words, folks who took out whopper no-doc mortgages they really can't afford may have their incomes overestimated by the CRA's,- leading to even more credit approvals their income does not support.
Very smart. I assume this "income estimate" can be disputed under 611. I wonder how an "estimate" would even square up with the FCRA's requirement for accuracy... |
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Even worse:.
If it's not available, how are we going to dispute? Send them a 4506-T and get a letter from them stating our dispute is "frivolous" ? |
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If they are making the estimate available as part of a consumer report, they had better make the information available to the consumer. I imagine it's only a matter of time before the lawsuits happen if they do not.
If they are providing it as a separate "service", not connected to the report itself, then yeah- it might remain hidden from us... |
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That's why the entities offering this Income Guestimator product require that customers who buy this product cannot use it for credit decisions, only to trigger reviews..
However, nothing has been said so far about using it for "evil"... such as employers who would LOVE this inaccurate data so they can set floor prices for laborso that way it will take you much longer in your career to work up to higher salary levels because you will be battling HR departments during every job change who will be instituting policies not to offer you 5-10% over what they see in your salary report... |
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DISPUTE THE INCOME.
CRA ANSWER>VERIFIED WITH THE SUPPLIER (who ever that is)>RNG???. Or. FRIVOLOUS. This post has been edited by GEORGE: 14 January 2010 - 12:22 AM.. |
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I'd also like to know how this squares with the ECOA, if credit is denied to a wife because the "estimate" doesn't know what her spouse earns, and she hasn't been given opportunity to tell them..
Eta: nm. just saw that it cannot be used for denials... |
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What happens if you live in a community property state like Wisconsin, where your spouse's income is 100% yours and vice-versa?.
If my DW earns $50K and I earn $50K, both of us have an individual income of $100K. That's the way the CP law works. I can use the $100K figure for applications and so can she. Suppose Mr. Income Estimator estimates my income at $100K, based on my limits and mortgages. (which were based on both our incomes). Won't the HR department at my next prospective employer be surprised, lol... |
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That's entirely plausible too..
Experian's answer for that is The Work Number. But it's not cheap enough for the largest employer (small business) to get motivated to fork over all payroll data to them so they can compile data dossiers. It's prevalent though among the F-1000.. I pulled my Work Number report and the last entries were from 1999. They have no idea what I've been doing for the last 11 years... |
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Only if the prospective employer is using Income Estimator to use to set your salary. Employers typically also use the prevailing wage and have some salary range which wont be vary that widely. They would figure out that the incomes from Estimator are household incomes...
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Yeah. Been there done that too. EDGAR is worse than CRAs but da law is da law...
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I currently live overseas and when applying for any credit, one has to show income (banks statements for the past 6 months), a summary of your monthly expenses (mortgage/rental agreement, car payments, etc) and evidence of employment (a letter from the HR department). Basically, you need to show the bank you can afford the Discover card or loan. There are no CRAs here, though the central bank does keep a record of defaulters.
My view of America is that it is credit crazy. Merchants want to make money off of financing than off of the product. People take out massive mortgages they cannot pay back in their lifetimes. I had a girlfriend who would buy high end handbags for thousands of dollars on credit and not have an one dollar note to carry in it. I think it's important to not only verify income but to base credit decision on incomes. I don't think this should be done by private companies using some estimate. It should be done by the government. Set up a system to let the IRS do it. If a consumer claims they earn $100,000, the system could ping the IRS with a simple questions (applicant claims they earn $100,000?) and the system could respond with a simple yes or no. I don't have the best credit in America (but I'm working on it). Part of the reason I was in this mess was I applied for and received lines of credit I could not afford while in college. I shouldn't have applied and creditors shouldn't have approved. Today, though my credit has improved significantly, I prefer to use cash. I opened a secured card with BoA and only use it to make hotel/car/plane reservations. When I'm in the States, I have a budget for shopping and entertainment and use my check card. A Discover card or two, auto loans and an affordable mortgage is all the credit a person really needs. You don't need a a store card for every store in the mall. So yes, I'm all for income verification. It's needed but needs to tightly controlled as well... |
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Is it possible to opt out from the cra's completely? (without going all cash)..
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YOU CAN FREEZE.
YOU CAN OPT-OUT. But that does not prevent accounts from being reported. Does not prevent "AR". "IF" income is part of the credit report...that part may be able to be accessed with FREEZE and OPT-OUT. All they have to do is pass some "LAW" that say it is their right to get it.. |
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IMO Employers just need to see the previous 2 -3 years payment history and that's it. They don't need to know where the trade-line's are from, or what your limits are..
Lets say I make $5 million a year.. Gosh, I bet I'm going to have some higher limits, a more expensive mortgage payment, etc. My wife wants to go get an entry level job making $65k... Well, do you really think they might not wonder why she lives in a house with an $18k/mo mortgage payment but is seeking a job to make $65k?. It's just more of the BS. An employer needs to see that you can be responsible with credit, and for maybe how long you've had credit. Because of this stupid authorized user thing, which should also be illegal.... It should strip out AU lines from the calculations..... |
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Never apply for anything, never open any accounts with anyone... never sign your name, give out your ssn, etc.... lol. you may stay out of their files.. but no promises...
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They default on it before it's paid off..
They get a mortgage that they never would be able to afford to pay off in their lifetime... |
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All of the punitive changes that are happening in the marketplace is doing nothing but ensuring the tightening of credit. Those who have plenty of it may lose a little of it, but they will be rewarded by keeping it..
Those who don't have it just got the bar raised higher so it's more unlikely that they can get to it should they want/need it.. You will wind up with a audience of consumers who fall into two groups... a rapidly shrinking base of people who have access to credit to buy something, and a much larger pool who operates cash-only and/or is extremely credit averse and can't buy your product if it's out of their income range or they don't feel like it's worth parting with their savings to buy your product, when before this they were able to with consumer financing.. Then you have an invisible hand that is picking up people who have ruined their credit and puts up obstacles for them to find employment, so if their credit goes bad due to joblessness which they didn't prepare for, divorce, their-fault, whatever, they'll be out of the market not buying anything altogether for a much longer period of time.. Simple as that really. That's why I think this economic recovery will take years and years... |
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The same questions floated in my head when I read that. I have a full time job, plus some freelance work on the side. My wife was laid off earlier this year and is currently going back to school, but does part time work but nothing that would be "consistent" income. The old fallback of the previous year's tax numbers for reporting income would be wildly inaccurate, but estimated income month-to-month can vary as well. So considering my own estimate of my income 6-12 months out can vary quite a bit, I don't see how a third party is going to even be close to accurate..
Based on the data in my report, I'm sure my income looks much higher that it really is. Like many here that use rewards cards, I pay for everything I can with them, and spread it out among different cards depending on the category, and pay them off before interest starts accruing. But this has the effect of showing lots of spending and having it paid off, but most of my income ends up being pushed through credit cards, not just discretionary spending. Most other people I know (well, outside of this forum ) use debit or cash for most items. The ones that use credit typically run up a card or make specific larger purchases and then slowly pay it off, so the actual transactions and money flow that can be estimated from the reporting data would be a fraction of their actual income. I'm sure there are algorithms to try to account for this, but I can't see it being close to accurate from one person to another.. The other thing is if they based part of the income estimates on current accounts and limits, well my total available credit (via Discover card accounts) is about 2.5 times my annual gross income (which isn't very high). The available credit was much higher a year ago before the cascade of CLDs and closures this past year, but even after all of that, it seems well out of proportion compared to my income. But the point is the credit data still doesn't tell a thing about my actual income. 10 years ago I was just an AU on 2 Discover card accounts with fairly small limits, while currently I have over 50x as much credit but still have roughly the same income. So just comparing myself 10 years ago to myself today, any estimate is going to assume a large increase in income over 10 years, when in reality that isn't the case at all.. So regardless of how well they attempt to make an estimate, the results are going to be all over the place, considering any "interpretation" of credit data applied to my own reports from 10 years ago vs today are going to look like my income has substantially increased.. <rant> It makes me wonder how much the CRA's and other major data collection companies had a hand in the laws and regulations to "protect the consumer." If the issuers are required to either go through tedious verification direct from the applicant, or pay a third party to estimate the income but instantly, it is clear that for the average Discover card it is cheaper to just use the third party method. So the CRA's and data collection companies now have guaranteed customers (the credit issuers) all in the name of "regulation". But I'm sure they'd be happy to sell consumer products touting "income scores" to go along with "income reports" so we can all verify the data. And if it is wrong, well I guess the only way to dispute it would be to send 4506-T forms directly to the CRA's so they can get your explicit permission to get your information from the IRS. Just another potential way to sap more money from the consumer while simultaneously charging the credit issuers more for that side of the service due to higher accuracy. </rant>.. |
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What is the big deal about showing a creditor your income? I can see if someone has a lot of unreported income that can be a problem, but otherwise why the wariness? I'd happily give a DNA sample if it meant I received a credit or other product that enhances my life...
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Whoa! I guess my tinfoil hat is way too big to even consider joking about a statement like that..
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Whats silly is that everyone is using Experian's model as a basis for this.
And everyone on this forum knows Experian is run by little brain damaged. Hamsters. Surely this will turn out well...lol.. |
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Estimate my income, that will be interesting, nevermind the fact that I also have my own business which generates income. Why dont the banks just come out and say what they mean. If you dont make six figures a year they dont want your business.
Just be honest. I have no desire to apply for anymore cards but this is just getting ridiculous... |
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For me it isn't about the creditor, but the third parties. If a creditor wants thorough verification of my income that is fine, the issue is the regulation is taking that decision away from the creditor. This is where the third party data collection companies are stepping in, creating services (in addition to the standard credit check) that the creditor can use as a sub-par substitute to real verification. If I am getting an auto loan, I don't see a problem with verifying my income with the creditor. When getting my mortgage, I promptly supplied a 4506-T so the lender could verify my income. But for more general Discover card accounts, most card issuers will find it is cheaper to use third party data than it is to deal with the documentation hassle for verifying income directly.
So, at least for me, the bottom line is if they want to verify my income, they just need to ask. If I say no, then they can tell me to go apply somewhere else, that is fine. In most cases for the type of credit I am applying for, I will happily provide the credit issuer what they want, but for their use alone and not for use by EQ, EX, ChoiceTrust, etc. If getting 0% 12 month financing on a $700 water heater is going to be a hassle, I will just pay it in full rather than going through the trouble of checking an extra box allowing [random store] to pull even more data on me.. The key here is forced verification. This kind of thing usually ends up benefiting a few corporations and making things more difficult and costlier for everyone else... |
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I would argue that the forced verification of people's credit history has actually improved access of credit in this country. And this step will enhance and finetune the process. Most people will have nothing to worry about it - there will be a few edge cases like people with unstable incomes and joint incomes (but joint applications will solve that issue easily)...
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Yes. However, even without forced verification, it is possible to get some idea of the income of borrowers who opt out of the system. Those would tend to be stated income borrowers. They can either sign individual 4506-T or get credit on stated income terms. They should expect higher APRs (to compensate for 'liar loan' risks) and less overall credit..
Still, I believe in opt-in/at least the ability to opt-out/. 4506-T gives you the opt-in mechanism. A sweeping data mining system IMHO compromises privacy more than it helps pick risks.. Some would be happy with a $500 limit and never having to share with the lender how much they do or do not make and how much they take in writeoffs. Others would be happy with a $25000 or higher limit and would be willing to share paystubs, 4506-Ts etc to get there. No right or wrong way to do it.. As I said in another thread, some entities have PP to pull the big three to verify payment history but have no business knowing the income. Too many sleazebags with PP to pull CRAs. My take: Opt-in only for income information in addition to strict separation between payment history access and income history access. Which is exactly what the current CRA + 4506-T/work number system accomplishes. Why fix it when it ain't broke. Don't CRAs collect enough fees as it is?. This post has been edited by nothingtolose: 14 January 2010 - 02:59 PM.. |
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I do agree that having the CRAs has streamlined the process of getting credit, but at what cost? It has at the same time streamlined some forms of identity theft, caused people to pay higher rates or be denied mortgages and loans due to mistakes in their report that aren't their own, and even worse: forced us to watch commercials of singing idiots to get our "free' credit report online! But back to seriousness, the identity theft problem ... there is always a way to take advantage of people or companies, and the same system that has made life easier for many people has ruined the lives of many others and cost them a lot of time, money, and stress to deal with it. And there will always be loopholes and forged documentation (both on the part of the lender and the borrower) to abuse any system put into place. Mortgage brokers that clearly committed fraud (under existing regulations that weren't enforced anyway) a few years ago have simply changed careers and washed their hands of it, no repercussions for most of them. I admit I typically have a more pessimistic outlook than most on how bad this type of thing turns out, but overall I think the amount of consumers that follow the rules that benefit will be a smaller number than the amount of consumers that lose access..
On top of that, there are too many ways for this to be extended and used for even more purposes outside of what most people think it would be used for. As was already mentioned, this is a simple system that could be used by potential employers to screen applicants and determine salaries offered to potential new-hires ... but without the balance of the potential employee knowing what they *should* on average be offered. If you buy a car, it is easy to look up the dealer costs, etc, so when working out a price you aren't walking in blind. But for something much more significant than a car purchase, where most people are already at a disadvantage, this definitely hurts the consumer.. Of course, there are countless other factors that come into play, but I fail to see how this can help me in the least. If a bank wants verification to give me a loan, I'll give it to them. If it is for a tiny line of credit, they are better of saving the extra expense (multiplied by total applicants) and basing it on the information that is already available specifically for this purpose. The don't give out millions of credit cards without already factoring in estimated losses. But to force them to take extra steps, in my opinion, does more harm than good to both the credit issuer and more importantly to the consumer.. Note: I am a tree-hugging free-market atheist conservative consumer-advocate, so take what I say with with grain of salt... |
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This ^^^.
That is a much more concise way of what I was attempting to say... |
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Now that explains A LOT!.
And, maybe the glares I got from other attendees of the 2008. Spoiler. Republican. State Convention as a delegate weren't of scorn and disgust at my being there (as my schizophrenic paranoia suggested), but simply concern over my condition!.. |
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Is it a type of disability that gets you preferred parking?..
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None. I'll happily provide income information to a prospective creditor. It's the guessing and the CRA's "income estimates" that I object to.
Why do they need to rely on an estimate when I have tax returns going back to 1975?.. |
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It's an additional datapoint needed for instant approvals. They already estimate your credit worthiness, now they also estimate your income. Since they cannot use it for denials, you are free to send in your tax returns to get a higher limit..
This post has been edited by LBCS: 14 January 2010 - 04:40 PM.. |
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YOU WOULD HAVE TO CLOSE EVERY SINGLE Discover card and LOAN (and PIF).
...and wait like 11 years (assuming you applied for nothing at all).. |
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The CRAs or other third parties can estimate your weight too. OH THE HUMANITY!!!..
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I see the usual nonsensical comments are here. I for one am not afraid of being honest with my creditors...
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Heg, I don't think most people view this as an honesty issue, but more of a control issue. Many people see how aspects of their lives are at least nominally decided by things beyond their control; things that may actually be accurate. So it's naturally somewhat disconcerting to realize there is another thing thrown into the mix that is only an estimate and will likely have wide variances in accuracy..
I. for one, can guarantee there is no way to accurately guage my income from the payment patterns visible on my CRs... |
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I under stand the control issue. But sometimes it seems the be pathological. Sure these models are deficient. The alternatives for card issuers is to verify income or use self-reported income. All three probably offend some people. Self-reported is inaccurate and verifying is expensive for card issuers.
Many of the same people would object to issuers collecting income verification.. So these people will never be happy with this part of the CCARDA.. "Models invade privacy". "verification? none of their damn business". Or "self-reported? imagined income inclusive".. |
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Note: In my earlier comments I had misunderstood the requirements, it isn't as bad as I originally thought as it doesn't require them to "strictly verify" income. That will teach me to not read from the source, thanks for the links to the PDFs. But I still don't like it!.
Back to my response ... Most of the comments I have read are not afraid of being honest with creditors, but don't like the idea of the CRA's and other data collection firms having additional influence on decisions for something that should be handled by the creditor. As many have said, they will be more than willing to provide verification, but don't like the idea of our good friends at EQ, EX, and TU being involved in that process. And why should they be involved? Credit ratings are based on a wide array of historic information, whereas income is easily quantified by the consumer. There is no reason this can't be handled by the bank, and be up to credit issuer to decide if strict verification is necessary depending on what they are offering.. The problem however is this:. The reason it is not strictly required is partly based on the inconvenience to consumers. So it won't be long before the CRA's have income estimating products and lobby to change this, since they have "solved" the problem of having a convenient way to estimate a consumer's income. The issue of privacy seems to have only been mentioned with regard to point of sale applications, and third party data mining was mentioned as an alternative to allow for more privacy on POS applications. So the intent seems to be to encourage creditors to either develop their own in-house methods or rely on a third party for income data, with "privacy" being one of the reasons they give for using a third party! That , for most of what I have read, is what the "usual nonsensical comments" are concerned about.. If I want credit, and the creditor requires me to verify income, I will. But I don't want a system that is likely to end up creating more hassle and coerced revenue to the CRA's... |
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I can't even remember how many of my creditors have my 1040's...
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But you provided them, correct?.
It wasn't some guess at your income based on certain criteria, and then posted on your file for others to see... regardless of it's accuracy... |
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Yes, they were "voluntary".
Since my balances are usually 0, I'd hate to see "estimates" of my income... |
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I'm curious to know whether or not they can use it for denials in an indirect fashion. Perhaps not a denial for the income estimate itself, but a quick debt to income calculation?..
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I agree that there is always going to be complaints no matter how it is handled, but look at the bright side, in most cases it makes forums like this more interesting!.
I think most of it boils down to differing views on how money and markets should function. I personally don't see a cost-effective need for Home Depot to verify my income for a potentially low-margin appliance purchase, whether that is the extra cost of collecting paperwork or the extra cost to them to get even more data from a CRA for a questionable guess about my income. The credit report is already designed to estimate my ability to pay, if they think I have a 30% chance of not paying, I'll either get a high APR or shown the door. If they think I have a 5% chance of not paying, I'll get better financing. But the point is for this amount of credit income really doesn't matter. If I had a higher income, I wouldn't be applying for credit in the first place. (And my limit would be set appropriately) Either way it's part of the risk model already. For larger amounts of credit, it makes sense to get proof from the borrower, and this is already done without the need for blanket guidelines that try to apply to all situations.. Overall, I fail to see how this is going to save more money than it costs. While leveraged debt is among the core causes of the mess we are in now, the high default rates on credit cards are an effect. Many of the newer defaults are people with that have typically had better income and scores than the usual risk group factored into expected losses. How many of the accounts currently being paid late or charged off would have easily passed a thorough income verification at the time they were opened? The point is, this demographic didn't quit paying (with Discover card) because they suddenly realized they lied about their income on their Discover card applications, they quit paying (with Discover card) because their mortgage went up, or they lost their job, or their house, etc. Income verification can't account for those things.. And to specifically address various complaints from pathological complainers like myself:. "Models invade privacy". I already wish I could have less of my information available to third parties, even at the loss of available/potential credit. It should be up to me how much privacy I am willing to give up to obtain credit. (And don't forget the complaint that Models are highly inaccurate, I say this as someone that always recalculates my exact income when applying for new credit, but would also likely get offered more credit based on a third party guess than what I provide myself.). "verification? none of their damn business". It is none of the CRAs business. It is none of ChoiceTrust's business. I don't want even more junk mail targeted to my income class (well in my case it would likely result in them saving the postage because I couldn't afford what they are selling ). But if the issuer granting credit wants to independently verify my income as a condition of a contract, then it is my decision to do so or walk away, depending on the need, use, and scope of the credit.. "self-reported? imagined income inclusive". I have zero sympathy for anyone complaining because something makes it more difficult to falsify or misrepresent information.. See, I only complain 2/3 of the time!.. |
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My comment was not aimed at your posts..
I concur with your final statement... |
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Well...many issuers are still trying to read the Fed's tea leaves on this....
Will report back later LOL.. |
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Lee Harvey, you are a madman. When you stole that cow, and your friend tried to make it with the cow. I want to party with you, cowboy. But the two of us together? Forget it!..
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I hope that everyone understands that these products have been around for almost a decade. The change in the law has just increased the banks' interest in the products. Some of you with HSBC Neiman Marcus cards may recall that HSBC did not request your income information on the online application and they haven't requested it for years (go look at the online app today and it still doesn't ask).
Perform a search on 'Equifax Income Predictor' and you will also see that Equifax had a similar product available in 2002... |
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I would imagine it could be a factor, but they will claim it's not..
I had an auto loan with WFS/Wachovia years ago. Paid on time the entire length of the loan. When it was paid off I applied for another loan with them. Denied for lack of credit history. Seemed like they denied me for something else, but didn't want to admit it for some reason...... |
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Has anyone used zabasearch to see what personal info is already out there? This is getting LUDICROUS.
NO MORE COLLECTION OF PERSONAL INFO!!!!.. |
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The ability for anyone to stick thier noses into what I make is pure BS. Estimate all you want, but know that it is an estimate, and there should be strong regulations against using this to judge people. If a creditor wants to know what you make in order to extend credit, let the consumer decide whether it's worth it or not..
A person's income, unless publicly employed should be private and non-discloseable. I feel it should be just as protected as the HIPAA information. For the self-employed, have them use the tax records they filed. If they file no income, then well I guess that balances out the risk/reward for false filing or manipulating "income".. There really is no other ethical or reasonable option. The feds should NEVER have any thought of giving out your tax records without your written consent.. What the #@$%^ is our country coming to? People, let's unite and oust these morons.. And LBCS, please leave my country and go somewhere that privacy is illegal. I agree completely with Cache22... |
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So there should be regulations against check income?.
Who is judging people?.. |
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YOUR country? Maybe you should go putter off some country where everyone agrees with you.
As for uniting against these "morons", that is the general purpose of a Republic, is it not? Or did you sleep through that day of civics? When is the last time you've written a letter, or started a letter writing campaign on the subject you want to appear so opinionated and fired up about? Started a website educating people? Petitions? Phone calls? Anything?????. Of course! Just like I can fire you because you wear stinky cologne, but will say it's because you were 3min tardy 10 times last quarter. I can fire you / they can deny you for whatever reasons they want..... it's just what is officially reported is what counts. This post has been edited by Jen23514: 27 January 2010 - 04:24 PM.. |
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Have a good weekend man. finally in the 60s here. gotta get out and get some sun tomorrow...
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THE PEOPLE COLLECTING THE CRAP DON'T EVEN HAVE TO BE ACCURATE IN THEIR INFORMATION.
HINT>L/N.. |
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I deffinately have a few concerns with this....
1.) The human factor: CRA's have access to your income and look at a dispute you are making about a $100.00 debt you supposedly owe. CRA's do not like to investigate as it is but this guy looks at your income and says this guy is squabling over a $100.00 debt, forget it buddy pay the dern thing.. 2.) Indirect denials: I have 3 store cards with an available credit of $5,000 and 2 Discover credit card with an available balance of $7,000. The CRA sends my income to the Creditor and I am declined because my debt to income ratio is too high. For many people the store cards collective balance might be lucky to get up to 10%. 3.) Unverrifiable or variable incomes. 4.) %100 CA's lie %102 of the time <[To quote George] - and CRA's are in their pocket. 5.) Ability to fix/correct the errors: it is easy to say that the errors will be negligeable and that this will help the overall credit system and I am by no means saying that it will not help more people out (whether they want it to or not) than it will hurt; however, even if the ones it hurt only make up %2 of the population are we ready to condemn these %2 of the population through no fault of their own to live lives struggling to get credit and maybe not be able to buy a house? I realize it is not suppose to be used for denials but lets revert back to reason #1 - the human factor. Would you not agree that creditors have turned people down for credit and used a bogus basis for the denial??? It does not take much to turn some one down for a bogus reason: I am sorry sir but you simply have too many inq. What are you going to say, prove it. Give me the formula to your scorring module and let me calculate this myself and see if you really did deny me for that reason? I think that the human factor allows for people to see what is"reported" as your income and covertly apply that to their decission - especially in grey areas. The thing is - the people this will help are the ones who would otherwise lie about their income and get in over their heads, the people it could hurt are the honnest ones... |
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SOME ERRORS ARE THERE FOREVER.
You can't correct them. You can't opt-out. You can't freeze them. If they involved GARBAGE COLLECTORS LIKE L/N. This post has been edited by GEORGE: 30 January 2010 - 01:38 AM.. |
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1) not going to happen.
2) this already happens even without "true" income data. 3) pay you taxes damnit. 4) this has nothing to do with anything in this thread. 5) this makes no sense.. |
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- Not gonna happen , haha. - Why add to it. - never said anything about not paying (with Discover card) your taxes, but not all income is taxable and not all people are required to pay taxes. ()I know someone who makes 15k non taxable which may noy seem like a lot but for a retiree he does alright, and manager he credit/money well). - The CRA's preetty much working for the CA's has a lot to do with this thread, as people pointed out alread CRA's reporting wrong income may want not be so willing to either provide the estimated income to the consumer or correct it and ther scum of the earth CA's will probably pull your credit to see if they should settle or should sue etc... When the people making these decissions are only concerned with maximizing their profits, the inaccuracy of the information is doubted, not their concern, and almost always assumed t`o be true even when conflicting evidence is provided. So yes the honnesty of the CA's and the CRA's intentions have a lot to do with this thread.. - Let me simplify number five for you:. A.) [How it could hurt people who tell the truth] I want to build a house. I have managed my credit very well but my credit report says I only make 20k a year. I make 50k per year and have consistantly done so for 5 years. You look at my CR my annual expenses, and my reported income and decide that this is too risky for someone making 20k so you turn me down for the loan to build my house. You tell me the reason is (some bogus excuse that I can neither prove or disprove). B.) [How it helps people who would lie] I want to buy a car, I am over extended, the bank asks me how much I make and I state 50k, I only make 25k, I am declined. I do not over extend myself, get a repo, or have negative marks on my credit fo this.. The people in category B were not reaponsable enough to manage their own credit so this law helps it be managed for them - ok great.. The people in Category A are getting screwed because we have to hhold the hand of the people in category B and help them cross the street.. Category B people are not the only ones who have bad credit, sometimes stuff just happens. Additionally, we should not impose a system that could impose more false information to base approvals and denials from (whether they are suppose to use the system for denials or not - it WILL happen).. Now I am not against proving your income for a loan, never said that I was. I simply have some concerns regarding the way they are going aboout it. If you want to give the lendors income information make it mandatory for any loan ammount of XXXX (or leave it up to the lendor regardless of the ammount) to require proof of income. For people who are employed by a bussiness require one year of pay stubs, or last years tax statement, or a contract agreement, or whatever.. For people who are self employed require a balance statement, a cash clow statement, and an income statement to show total assets, liabilities, and owners equities of the bussiness. Since they are self employed this bussiness is their asset and the overall health of the bussiness should demonstrate their income as well as stabilitiy of the income.. This information is likely to be much much much more accurate and is limitted is provided on a limited scope - ie. the lendors get to see it; not the CA's, not the CRA's, not the future employee, not anybody else claiming they have PP when they don't, nobody except the person who is applying for the credit and the person deciding to give it to them. Additionally, the information would be so much more accurate the lendor could actually use it as a reason for denail... |
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I don't know where this idea the CRAs are asking or getting your income is coming from. They aren't. They provide nothing that a lender can't get from software that analyzes the information in your credit report can't get. Or a lender can just ask in whatever specificity they desire and you are willing to provide..
This post has been edited by cashnocredit: 30 January 2010 - 01:21 PM.. |
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The article sited in the beginning of this post states that this very well may change in February:.
"In hopes of such a decision, the three big credit bureaus have been updating or rolling out products that seek to estimate consumers' incomes, based on information in their credit reports, such as the size and age of their mortgages or the size of their credit limits.".. |
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Yes they are creating new products and will be marketing them. but that does not mean they do not have similar products already. In fact I know for certain on large, devilish CRA has such a product...
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I wouldn't doubt it.
Anyway - thats where the idea that the CRA's are asking to get your income is comming from - more correctly the idea that they are going to report your estimated income with or without asking.. |
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Sure but they are only using the info in your credit file. It's pretty inaccurate. Their estimate of my income probably went up 2 orders of magnitude in the last 3 years whereas my actual income has dropped by about half. They would have been better off to drive by my home. An estimate from that would be a lot closer. But then they have an address but they don't have any idea I own a home, or two, or a 100 unit+ apartment complex because none of that is in my report though some of it is public record..
What the banks really want (and FICO sells) is your ability to pay for additional debt and the info in a CRA is better at that. At least if you are already using credit. But the law requires that they consider income and/or assets as either self reported, estimated from data in a CRA, or recieved in some other way. This way they can do the "don't ask don't tell" dance in sensitive situations where people don't want to give income info and still comply with the law.. It's really not much of a change from what they do now out of necessity... |
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AFAIK the CRAs and others are not restricted to using only data in your consumer credit report. Consider a report of someone in rural texas that is the same as the report of someone living in San Diego; the income estimate would not be the same for both...
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I believe, or rather assume, they use demographic info in combination with the CRA database to assess income much as they do to assess risk. However, it is general external info not tied to the individual. They do this now in wide swaths where home prices have collapsed. Insurance companies use zip codes in combo with driver history and, ahem, credit reports for rates. Such is life...
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The CRAs do modeling with both regulated and unregulated data. The unregulated data is individual data. The regulated data is what is covered by the FCRA and other such laws...
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Weird vestigial post. Content removed.
This post has been edited by cashnocredit: 30 January 2010 - 06:41 PM.. |
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I do know that CRAs can use databases they aren't allowed to report on for modeling. Sizeable databases of current verified salaries and income exist that can be and are used for the statistical regression but if a lender wants an income estimate they can't provide the verified income only the estimate from the regulated database..
Funny thing about federal laws. When a company hires people (even the CEO) it is not allowed to ask - or even consider - their age. But when an company sells stock to the public, the age of all senior execs is specifically required in the proxy docs. Lots of contradictions developed over the years as policy and fairness issues evolved in some areas but remain somewhat anachronistic in others.. This post has been edited by cashnocredit: 30 January 2010 - 06:42 PM.. |
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THEY WOULDN'T ASK IF YOU WANTED INCOME REPORTED...EVEN IF IT WAS REQUIRED BY LAW TO ASK.
(if they actually get away with reporting the income). YOU WON'T BE ABLE TO HAVE IT REMOVED or CORRECTED...THEY WILL SAY>"IT IS A MATTER OF RECORD". This post has been edited by GEORGE: 30 January 2010 - 11:27 PM.. |
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OTHER THAN OPT-OUT or OPT-IN.
...and. FREEZE. YOU HAVE LITTLE CONTROL OVER YOUR OWN CREDIT REPORTS and THE INFORMATION CONTAINED WITH-IN. Kinda' sad..... |
