ARE YOU APPLYING FOR A CREDIT CARD? WE NEED TO CHECK YOUR INCOME AND ASSETS
Currently, the entire financial industry is going through a major overhaul including the credit card business. Credit card companies have slashed credit limits of many people who have not used their card in a manner of time which has messed up the credit scores of the holders. Furthermore, more people are getting denied a credit card because of higher standards being enforced. I remember I got my first card in college in my junior year. I was able to establish a $20,000 credit limit by the time I graduated college. My main reason was to establish a great credit score. However, most people abused the credit cards. Bankruptcies continue to increase as they have stopped paying on their cards.
The credit card companies will start looking at your weekly paychecks to determine if you will obtain a credit card along with the amount. The Federal Government has mandated that the credit card companies must take into consideration the applicant pay and other assets to make an overall informed decision when giving out credit. This does make sense to me. The Credit Card Act which was passed last year stated that the credit card companies can use an estimated income based on taxes filed, amount of mortgage and size of credit limit.
Mortgage lenders require borrowers to document all income and assets by collecting all your financial information. Pay stubs and bank statements does not cut the mustard to obtain a mortgage. Lenders require copies of last two years of taxes filed. Plus, they are required to fill out form 4506-T that allows the IRS to release their tax filings to mortgage lenders. The old days of doing business are gone. I met with a lady the other day who wishes to purchase a house. She has not filed her taxes for 2008. I informed her the first step will be to file 2008 and 2009 taxes to determine her real income reported to the IRS.
TransUnion has a product that estimate the annual pay of people to market credit cards to these people. Now, lenders are interested in this product to figure out debt to income ratios before issuing new or existing credit. I am sure TransUnion charges the banks for this service. A new industry is being formed overnight with the Credit Card Act. Bank of American and Chase require applicants to disclose household income, rent or mortgage payment and amount of money in bank accounts.
Please make sure you do the following 5 Steps to ensure your credit data is accurate:
- Obtain a copy of your credit report every six months to verify all the information on the report is correct. Please correct all data that is not correct so the report is up to date at all times.
- Make sure you correctly answer all questions when applying for a mortgage or credit card. Make sure your employment is correct because they will start verifying your employment.
- Make sure you file your taxes on time every year if one wishes to obtain a mortgage or credit card
- Pay all your bills on time including cell phones, utilities and everything else because they sell this data also to determine ones credit worthiness
- Live within your means and BE HAPPY
Make the Call, Set the Plan, Do the Deal$!
Feel free to listen to my Radio Show to learn more about the phoenix real estate market, new trends, and the latest opportunities. The Real Estate and Beyond Radio Show Airs every Saturday from Noon-2:00pm on Conservative Newstalk KKNT 960am in Phoenix, Arizona. You can listent to past shows, or stream on-line.
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