When you list your income on credit applications, the only way a potential creditor can verify this information is by contacting your employer, or, if you are self-employed, requesting a copy of your last IRS filing. If you ever feel that there has been a misunderstanding about some income information that you have listed on a credit application, you can always contact the creditor directly to clear it up.

Another way that potential creditors can get an idea about your income (but not verify it) without you filling out any direct application for them is through their purchase of marketing profiles from companies where you have answered questions about your income bracket via "customer surveys." By law now, you must be asked if you wish to "opt out" of such profiling lists that, among other types of businesses, may be sold to credit card issuers looking for new customers.

As for consequences for falsifying a credit application regarding income, it is not only illegal, it just doesn't pay. You are, by signing the application, legally stating that you believe the information you are providing to be true and correct. Although it is likely that most credit card companies are going to catch dramatically false income information because of their normally thorough credit and income checks, it could slip by.

If they find out later, they can immediately close the account, leaving you with a negative notation on your credit report. Or, if there came a time that you fell behind on your payments and explained to the company that you just didn't have the income to pay, they are likely to pull up your application information and question the discrepancy. Not only might your financial hardship be viewed as less legitimate, considering the higher income on your application, but your account might be closed as well.

For more information on your consumer credit rights and on your consumer information rights, you may wish to visit the Federal Trade Commission's web site.