When Needed, How May One Show Proof of Financial Responsibility?
- Bank records can provide a detailed snapshot of your income and expenses. If you are seeking funds from a bank with which you do business, they are likely to examine such things as the average amount of money in your bank accounts over time, the average size of expenditures and how many times, if any, your account has gone into negative numbers. Bank records can serve as proof of your income if you do not have pay stubs or other traditional income verification.
- Statements from your credit accounts can also prove your financial responsibility. Furnishing credit card account statements that show you consistently make on-time payments and keep your outstanding balance well below your credit limits can ease creditors' minds about your risk level. Showing mortgage or rent payment records can help as well.
- Landlords give an advantage to financially responsible renters. Landlords can add a personal touch to your financial references by writing a short statement, essentially a letter of recommendation, that describes your tendency to pay rent on time and in full, and the fact that there have been no complaints against you during your tenancy.
- A credit report and credit score can serve as objective proof of long-term financial responsibility in all of your affairs. If your potential lender or creditor does not wish to perform a credit check on you --- they most likely will --- purchase and print a report and furnish it to the lender. Checking your credit report can also help you boost your credit reputation, as it can show you status reports from each lender and creditor with which you do business.
- Pay stubs, or 1099 forms for contractors, can serve as proof of your income, although they shed no light on your expenses or discretionary spending habits. Lenders may use your income verification to determine credit or loan limits for your account to ensure that you do not borrow more than you can afford.