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Personal Income Key In Credit Decisions

Personal Income Key In Credit DecisionsThere have been a good number of changes to the credit card marketplace in recent years. Most of these new rules were made to limit the ways in which credit card issuers can take advantage of consumers.

On Oct. 1, yet another change will occur — and it could cut the number of credit cards issued.

Instead of reporting your household income on credit card applications, you’ll instead be required to report personal income.

So what does this mean for all potential cardholders?

Fewer people will qualify for a credit card, as anyone who isn’t employed will no longer be able to take credit for a family member’s income.

For example, if you are a stay-at-home parent looking to secure a line of credit, you cannot include your spouse’s income.

Wthout income, your application will most likely be declined.

This new regulation will impact students and stay-at-home parents the most.

But there still are a few ways to gain approval.

You can always use a creditworthy co-signer or file a joint application. But any missteps will bring down the credit score of two people instead of one.

To be honest, I’m not sure why credit card issuers allowed people to apply using someone else’s income, but this is a welcome change that should reduce defaults.

If you plan to fill out an application anytime soon, make sure you have a verifiable income.

If you don’t, avoid applying to save a few points on your credit score.

If you are looking for a new card, compare credit card offers in our extensive database.

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