What is an Income Verification Letter?

Money and tax documents

If you’ve ever been asked to supply an income verification letter when applying for a loan or a new credit card, you may have been left wondering “What is an income verification document?” Income verification is a common way for banks, lenders, and other institutions to get legal proof of salary for their applicants, ensuring the applicant has stable income and can afford whatever it is they’re applying for, and that they have not lied about their income.

An income verification letter is just one of several forms of income verification. It can be provided by an employer on your behalf, summarizing how long you’ve worked for the company and your current salary. In addition to or in place of this letter, you might also be asked to provide pay stubs or tax documents. Below, we’ll cover some common instances where an income verification letter might be requested.

When Might I Need an Income Verification Letter?

Proof of income is often required when you apply for a loan or credit card, but there are other instances where you might be asked to provide one. We’ll cover the most common reasons, below.

  • Applying for a Loan: When you apply for a loan, it is not uncommon for the lender to require proof of income. While your credit score and credit history can show them how financially responsible you are, proof of income provides further verification that you have stable, consistent funds to make your payments.
  • Applying for a Credit Card: An income verification letter may be requested before you can get approved for a credit card. Like with loans, this is done to provide proof that you’ll be able to pay your bill each month.
  • Renting a Home or Apartment: Planning to move out on your own for the first time? If you’re renting, it’s not unlikely that your potential new landlord will ask you to provide proof of income to show that you’re capable of paying your rent in full and on time each month.

If you receive paper paychecks from your employer, the potential need to provide proof of income in the future is just one of many good reasons to save your pay stubs. If you receive direct deposits, your work may have an online portal where you can access a full record of your payday history — if not, you can ask them to supply you with an income verification letter.

Consult Xpress Cash for Additional Help

Have lingering questions surrounding what is an income verification form? The friendly team at Xpress Cash is always here to help. If you’re having trouble coming up with proof of income, we can also show you some of our loan options that do not require income verification. Contact us or visit us in Michigan today to get started!