Hacker News Reader

Comment by travoc | Hacker News Reader

Can you tell us who is giving out large loans without verifying income?

All 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.

They usually ask you for your income in the credit card application. If you lie, you may be committing credit card fraud.

Hence, the key word "VERIFYING"

These 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.

It'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.

A 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.

> 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.

If 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-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.

Self-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.

On 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.

I've never had my income verified for anything less than a car loan. Every revolving credit account has taken me at my word.

Every 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.)

Reply on news.ycombinator.com