What can count as 'income' on credit card app?

What can count as 'income' on credit card app?
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I’ve looked into a number of articles that address this generally, but I’m still a bit in the dark w/r/t my exact situation.

I’ve never applied for a credit card before, but have good credit (740 ish) and want to get one. I recently sold equity in a business that I owned, however I do not currently have an income generating job. I’m also selling my house for a profit, and will be closing this week. Can this type of income be reported on my application?

Bonus question: Sounds like from what I’ve been reading, selling my house/paying off my mortgage might actually hurt my chances at acceptance here? Should I brace for a credit hit when my mortgage gets paid off? Thanks for any attention to this!!!


Hi @cblsm.22 … Profit from the sale of your home wouldn’t count as “income” for a credit card application.

For one thing, a home sale is a one-time event. You might sell your house this month for, say a $50K profit, but that doesn’t mean you have $50K a month in income – i.e. you aren’t suddenly “making” $600K a year. Credit card applications ask about income because they want to know how much money you have coming in on a regular basis.

More important, “income” refers to money that comes in from an external source and adds to your net worth. A home sale doesn’t actually change your net worth. It just converts $X worth of house into $X worth of cash. It’s really no different from taking 40 quarters to the bank and getting a $10 bill in return. You aren’t “making” any money. You’re just changing how your wealth is distributed.

That said, credit card applications often ask questions about assets including bank account balances, and the profit from the sale would definitely count as an asset.

What is income on a card application? Things like wages from a job. Profit from an ongoing business. Scholarships and grants. Distributions from a trust. Payments from social security or a retirement fund. Also, if you’re over 21, you can report all income that you have a reasonable expectation of access to, which means you could include income of a spouse or partner on the application. This article goes into more detail, but a good rule of thumb is: If you wouldn’t report it as income on your taxes, you can’t claim it as income for a credit card application. (Profit from a home sale is a capital gain for tax purposes, not “income.”)

For the second question, your “credit mix” is a factor in your credit score, so it’s possible that paying off the mortgage could have an effect. But the extent of that effect would depend on what other accounts you have.


@paul Thank you on the clarity of what is income and what isn’t. I don’t have a credit card either. I plan on getting one in the future. Like they sometimes, timing is everything.