How Is Income Reported to Credit Bureaus?

Credit reporting bureaus are financial services companies that, for a fee, provide lenders and other parties information about an individual's credit history. These bureaus collect information about the individual's credit history from public records and from data provided to it by lenders and other types of creditors. Contrary to popular belief, a credit report -- the bureaus' dossier of information on the individual's credit history -- contains no information about the individual's income, although lenders may ask about it.

Credit Reports

Credit reports are semi-public documents that holds information about an individual's credit history, including an itemized list of loans that the person has taken out in the past, including credit card loans and home mortgages. A person's credit score -- a numerical rating of a person's relative ability to repay credit -- is formed using information drawn entirely from this report. Any information not included on a credit report, including the size of a person's income or assets, will not affect a person's score.

Income

A person's income is not reported to credit reporting bureaus, because the credit reporting bureaus do not include this information on credit reports. Although individual lenders may wish to know an individual's income, credit reporting bureaus cannot tell them. In fact, it is illegal for most employers to share information about an individual's salary with outside parties without the individual's permission or in specific legal situations involving financial disclosure.

Lenders

Although a person's income may not be included on their credit report, many lenders will still request this information from a prospective borrower. This is because the size of a person's income has, in the eyes of lenders, a direct bearing on their ability to pay back any loans offered to them. The individual may be required to provide the lender legal evidence of his income, including pay stubs and W-2 tax forms.

Considerations

Although income is not reported to credit bureaus, credit bureaus do receive information about other types of financial transaction others than straight loans. For example, many auto insurance policies are commonly listed on a person's credit report. In addition, if a person fails to pay a bill, the creditor may list this unpaid billed to the credit reporting bureau, even though the debt did not originate as a loan.