5 ms·
Can you tell us who is giving out large loans without verifying income?
by travoc 5y ago
Can you tell us who is giving out large loans without verifying income?
- runako 5y agoAll major US credit card issuers. Many auto lenders. Most of consumer credit outside of mortgages operates without any real income verification. Here, "large" runs at least up to $50k-$100k per lender without any meaningful income verification.
- rafale 5y agoThey usually ask you for your income in the credit card application. If you lie, you may be committing credit card fraud.
- devmor 5y agoHence, the key word "VERIFYING"
- intended 5y agoThese issues are abstracted by the delinquency rate. Some X% will not pay on time. By reducing the information taken, do we add sufficient additional users to overcome the X% loss expected.
- rafale 5y agoIt's a high trust process in a high trust society. Assuming that most people are honest, it works out well. Verification bogs down the process and may discourage people from applying. Clever fraudsters can probably pass that anyway.
- runako 5y agoA person may open a credit card at 18 and be given a limit of $2,000. That card may still be open 10 years later, when the issuing bank raises the limit to $20,000. Many banks do not even require attestation of income to raise limits like this. This is what I mean by no meaningful income verification. Income verification is what happens when you buy a mortgage. It has nothing in common with the credit card process.
- lamontcg 5y ago> If you lie, you may be committing credit card fraud. It seems like we're heading for a society lying and fraud are engaged in and almost tolerated a lot more, and certainly where resources for enforcement are stripped.
- ballenf 5y agoIf you work for a large company or a small company using most payroll processing services, your pay is probably easily retrievable by any creditor. https://krebsonsecurity.com/2017/11/how-to-opt-out-of-equifax-revealing-your-salary-history/ https://krebsonsecurity.com/2017/11/how-to-opt-out-of-equifa... Even though the article is old, I saw my last few years' pay history in the links provided there. Opting out feels like a devil's bargain: credit will presumably cost you more or be harder to get as a result. But there's no fine-grained way to choose who gets the info.
- runako 5y agoSelf-employed for many years. Anecdote, but I can tell you that my access to consumer credit has not been impacted in any way by my compensation not appearing in those databases.
- archildress 5y agoOn larger loans, sure. But the credit score metric that is the first indicator does not inherently use income. You self report with no verification whatsoever.
- devmor 5y agoI've never had my income verified for anything less than a car loan. Every revolving credit account has taken me at my word.
- jdavis703 5y agoEvery landlord I’ve had (except for a sketchy cash-only guy) has verified my income. They also verified for my first car loan (I guess due to lack of any existing loans.)