Does having zero income affect my credit rating?

p3ncilsharpener

sleepyjones said:

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.

Who actually has that?  I've yet to see a credit card's terms and conditions that requires the customer to update them regarding changes in their employment status/salary, only changes in contact details.

phillw

p3ncilsharpener said:
Who actually has that?  I've yet to see a credit card's terms and conditions that requires the customer to update them regarding changes in their employment status/salary, only changes in contact details.

Halifax has this specific wording:

B10.5 What if your circumstances change? As soon as possible, you must let us know if your circumstances change in a way that we may not otherwise know about and that is likely to change our assessment of your financial standing. Examples include losing your job or your income significantly reducing; say because you are off work with long-term sickness. If you have money worries or find yourself in financial difficulty, please contact us to discuss your options. If you prefer to speak to someone independent before you speak with us, several free advice services are available. We’ll be happy to give you details. 

HSBC is less explicit, but you gave them your income as part of the application

14.2 It’s up to you to make sure the information you give us is accurate and up to date. And you must tell us if anything changes, within 30 days.



It would probably only be an issue if you called them up and asked them to write a debt off because of their irresponsible lending, but they can then throw back a fraud criminal charge if they would have reduced your credit limit had you disclosed your income

p3ncilsharpener

phillw said:

p3ncilsharpener said:
Who actually has that?  I've yet to see a credit card's terms and conditions that requires the customer to update them regarding changes in their employment status/salary, only changes in contact details.

Halifax has this specific wording:

B10.5 What if your circumstances change? As soon as possible, you must let us know if your circumstances change in a way that we may not otherwise know about and that is likely to change our assessment of your financial standing. Examples include losing your job or your income significantly reducing; say because you are off work with long-term sickness. If you have money worries or find yourself in financial difficulty, please contact us to discuss your options. If you prefer to speak to someone independent before you speak with us, several free advice services are available. We’ll be happy to give you details. 

It would probably only be an issue if you called them up and asked them to write a debt off because of their irresponsible lending, but they can then throw back a fraud criminal charge.

Interestingly the one I picked at random (Barclaycard) appears to have no such clause.

phillw

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?

Don't credit applications work that way if you're doing pension draw down?

agent69

I'm suprised by the comments here. There must be lots of people who take early retirement and use their savings to bridge the gap up to receiving a pension.

I would have thought they were far lower risk than a young person who has only just got on the employment ladder.

MattMattMattUK

agent69 said:

I'm suprised by the comments here. There must be lots of people who take early retirement and use their savings to bridge the gap up to receiving a pension.

There will be some, but most in that situation will have a private/occupational pension. Additionally most will not try to apply for credit cards in a period when they have no income, it would be sensible to apply for a few ahead of retirement so they were there for use when S75 was needed, but apart from that not applying for new financial products whilst not earning would be the norm.

agent69 said:

I would have thought they were far lower risk than a young person who has only just got on the employment ladder.

Not really, a young person with no assets could still pay a low amount over many years to repay the amount. An older/retired person could have no assets and with zero income there is nothing to claim against. As has been mentioned if someone has savings and is living off those then applying for a new credit card would not seem to be in line with that claim, use the cards they already have until they have income again. 

[Deleted User]

agent69 said:

I'm suprised by the comments here. There must be lots of people who take early retirement and use their savings to bridge the gap up to receiving a pension.

I would have thought they were far lower risk than a young person who has only just got on the employment ladder.

What if said person lost their savings somehow and then has no income? Are they going to have to go out to work again? Younger person could get a new job