View Full Version : Salary vs credit score: which is more important in a credit card app?

Emilio Lizardo
10-27-2005, 02:33 PM
I'm looking to get a low-interest credit card to consolidate some of my debt. I make a fair living, but the mortgage on my house is somewhat high as a proportion of my income (about 25%) which I understand can be problematic. Of course, I own the house jointly with my wife, and am not responsible for the full amount. My wife earns about 50% more than I do, but she has more outstanding debt and a lower credit score. Is there a quantitative way to balance out the pros and cons to determine whether I am better off appying for a card singly or jointly?

10-27-2005, 02:52 PM
I don't know, but I've once accidentally got approved for a credit card where I didnt' specify any income. I called them later about it (I believe it was Capital One) and they said that the income on the official application was listed as $0.00 and I still got approved. :dubious:

10-27-2005, 02:59 PM
If you've got the higher score, you should be the one to apply for the card. It's not just your salary that goes on the application, but the household salary (hers and yours combined).

As for Capital One, well, they're a bit shifty and work a bit in the sub-prime markets too. Here's another reason to stay away from them. (http://boards.straightdope.com/sdmb/showthread.php?t=323540)

10-27-2005, 03:04 PM
If I made $1M a year, but never paid my bills, would you want to extend credit to me? The credit score is probably going to determine what cards you can get, at what rates and charges. Salary might influence credit limits, but won't make or break you.

10-27-2005, 05:44 PM
I don't think there is any way to figure out their exact formula but I believe the credit score is much more important. The credit score itself doesn't take income into account much at all and it is used for lots of important decisions so that should tell you something.

I believe they would use the credit score mostly for approval and your income to help set your limit if you are approved.

A person with a great credit score and $100,000 income is going to be selected every time over one with a $200,000 and a poor credit score. Your income may decide if they give you a $5000 limit or a $20,000 limit though once you are approved.

10-27-2005, 06:20 PM
Shagnasty hit it right on the head. Credit score is used to extend you credit and income is used to determine the amount of credit to offer.

For credit cards anyway. We will offer you a credit card if your score is around 600 or above and we'll offer you between 12% and 25% of your household income as a limit.

10-27-2005, 11:11 PM
My son works a part-time job making $8.00 per hour. As is their custom, USAA sent him a pre-approved card when he turned 18. He charged modest amounts and paid the balance off every month. His $500 limit is now $1,600.00. They offered to increase it to $3,200.00 but he told them to keep it at $1,600.00. He applied for credit at a jewelry store and was approved, and that card was sold to Citi, who gave him a $5,000 limit. Again, he charges modest amounts and pays the balance off every month. American Express sent him a pre-approved inviation which he accepted and he was given an $8,000.00 limit. Again, modest charges, payment in full.

Each of them was well aware that his gross monthly income was a mere $1,000.00 per month.

You think maybe it was his good credit that got him those cards? ;)

I had a student loan but it was paid off and dropped of my credit report years ago. I've only in my life ever had one credit card at a time, have almost always paid cash for my cars, and it wasn't until I bought a house that I even ever had any debt (anytime I charged anything I paid it in full, since internet payments it was paid before I even got billed most of the time). I didn't get a fantastic interest rate because my mortgage broker said my credit file was too bare. The only reason I got approved at all was because of my income (not great, but enough to keep my debt-to-income ratio pretty low because I was buying a moderately-priced small house). He told me what my score was but now I've forgotten it, it was only modestly good, I remember that.

So, if you have little to no credit I think they do look at income - but if you have good, established credit I don't think they even look at that part of the application.

Send questions for Cecil Adams to: cecil@straightdope.com

Send comments about this website to: webmaster@straightdope.com

Terms of Use / Privacy Policy

Advertise on the Straight Dope!
(Your direct line to thousands of the smartest, hippest people on the planet, plus a few total dipsticks.)

Copyright 2018 STM Reader, LLC.