Income Information on a Credit Report

A person who makes the minimum wage can be a far better risk than a millionaire, because repaying debt has little to do with what you earn. This does not mean the national credit bureaus do not know your income or that your income cannot affect your credit. Even if you never reveal a salary to your lenders, the bureaus are exceptional at guessing it.

Identification

Lenders report anything you put on an application to the credit bureaus, even your salary. However, the credit bureaus do not list this on your report, because verifying total income for the millions of consumers with credit profiles would be an administrative nightmare. You could, for example, have several sources of income, such as dividends and side income like selling items on eBay, that come with little documentation.

Effect on Score

Salary affected credit scores during the early years of the FICO model in the late 1980s, according to MintLife. However, the credit bureaus dropped this because of difficulty in obtaining accurate salary information because most salaries were reported by consumers. Also, salaries have only a slight correlation to a willingness to repay a debt and are more important for determining an ability to pay. A FICO score calculates a person's diligence in paying back a creditor, not whether he can afford a loan.

Considerations

Lenders can predict a person's income based on information from his credit report. The credit bureaus have done this for years with 75 to 85 percent accuracy, according to Wallet Pop. Most lenders do not practice this, but the CARD Act allows creditors to predict income, and some lenders have no choice but to use a statistical model. Retailers, for example, will do this for instant credit approval rather than require W-2's or hard proof of income at the checkout line.

Warning

On any application, you must state your income as accurately as possible or it could be construed as fraud. Also, lenders may use their own credit scoring systems that include salary into a risk calculation. Thus, getting a raise or a higher salary before shopping for a loan can help your credit-worthiness.