The Credit CARD Act of 2010 requires issuers to consider an applicant’s income—as estimated by the credit bureaus—when considering credit card approval. This provision in the CARD Act, which went into effect Feb 22, 2010, ushered a new era of tightened lending and stepped-up regulations on consumer credit that helps deter the lax lending practices that fueled the financial crisis.
The three big credit bureaus estimate consumers’ income based on credit report information like a consumer’s credit limit and size of mortgage. In turn, issuers are required to consider potential applicants’ income, as well as outstanding debt, ability to pay, and assets, before approving a new credit card. Credit scores may no longer be the key factor in lenders’ future credit decisions.