Does having zero income affect my credit rating?

sleepyjones

Just thinking out loud but if you were to setup a monthly transfer from your savings account to your main account, of say "£2000" ... could you then say your income is £24,000 (12 X £2000)  and you'll have a bank statement to show that "income" coming in on the same date every month?
Will they care enough to look further into where the money is actually coming from?

Thrugelmir

Your income has no bearing on your "credit score".  As it's not something which is reported to the CRA's.  However it is an important factor when anyone is considering offering you any form of line of credit. 

p3ncilsharpener

sleepyjones said:

Just thinking out loud but if you were to setup a monthly transfer from your savings account to your main account, of say "£2000" ... could you then say your income is £24,000 (12 X £2000)  and you'll have a bank statement to show that "income" coming in on the same date every month?
Will they care enough to look further into where the money is actually coming from?

No, that's fraud.

The key point of "income" is "in" i.e. it's coming in.  It can only "come in" from outside, so you moving money around isn't income because it's already "in."

If you sloshing money around was "income" it'd be taxable, and you definitely wouldn't want to be paying tax on that.

MattMattMattUK

p3ncilsharpener said:

MattMattMattUK said:

agent69 said:

I've just been through the credit club application but couldn't use £0 as my anual income (early retiree and living off savings until pensions kick in). I put in £1,000 as this was the lowest figure it would accept, but wondered what affect nil income would have on my credit score?

Technically that is application fraud and could result in a CIFAS marker, although it is so low the might just presume that you are not credit worthy. In reality the reason that £1,000 is the lowest that it would accept is that it would be insane to lend money to someone, or give them a credit facility, when they have zero income. 

The CRAs have no record of your income, you are asked to submit it as part of an application and if relevant you are asked to back that information up post application. 

agent69 said:

My current bank appear happy for me to have had a credit and debit card for the last 30 years. I was just curious why the credit club said my credit score was >960, but I had zero chance with a credit card application.

That is because at the point of application you passed and currently you remain in good standing so have no need to be reassessed, however you might have also seen the complaints where Barclaycard lowered people's credit limits to very low amounts and then said that if people wanted higher limits they will need to prove their income. Expect much more of this from all card providers over the next few years.

Also, as others have said, your credit score is a made up and meaningless number. 

They didn't apply for credit, they made an MSE Credit Club account.

Ah OK, I read it that they completed the application through the Credit Club, not that they only browsed product options. 

The_Fat_Controller

However, declaring a "lavish salary" on a credit application when you do not have one is fraud.

sleepyjones

Yeah ok, Don't do that then

agent69

The_Fat_Controller said:

However, declaring a "lavish salary" on a credit application when you do not have one is fraud.

The point I was making is that you could have a high paying job, apply for a credit card in good faith and find yourself unemployed a couple of months later.

MattMattMattUK

agent69 said:

The_Fat_Controller said:

However, declaring a "lavish salary" on a credit application when you do not have one is fraud.

The point I was making is that you could have a high paying job, apply for a credit card in good faith and find yourself unemployed a couple of months later.

You could, but then people at that level normally have contracts which mean they get a good redundancy package, they normally have reserves, they normally have assets. Also they tend not to be unemployed for very long. Someone with no job, living off savings is usually not a good lending prospect, they have diminishing reserves and the question would have to be asked, why is someone in that position looking to borrow.

sleepyjones

agent69 said:

The_Fat_Controller said:

However, declaring a "lavish salary" on a credit application when you do not have one is fraud.

The point I was making is that you could have a high paying job, apply for a credit card in good faith and find yourself unemployed a couple of months later.

Also it would be detailed in the terms that if your circumstances change you need to inform them, so if you got fired a month later and informed them they'd probably put a hold on your card ... I don't know how many people would actually do that, but I guess they're covering themselves by having that in the terms.

[Deleted User]

agent69 said:

The_Fat_Controller said:

However, declaring a "lavish salary" on a credit application when you do not have one is fraud.

The point I was making is that you could have a high paying job, apply for a credit card in good faith and find yourself unemployed a couple of months later.

There is a difference between having a job when you apply and being honest (and then having circumstances change) and claiming to have an income based on something like savings which you could easily blow. If you are not working, you are then stuffed, but the person losing their job could just get another one.