Income verification refers to the process of verifying an individual’s reported income. Many employers, landlords, lenders and government agencies turn to income verification services to ensure an individual reports their income accurately. There are several ways employment and income verification services can verify an individual’s income, such as:
Tax returns: An individual’s tax return is a reliable and accurate document that lists a person’s income, such as their adjusted gross income, tax credits, deductions and more.
Pay stubs: Reviewing pay stubs is another method an employer or lender may confirm an individual’s income, as it lists their gross income, net pay and deductions.
Bank statements: Combing through bank statements is another popular method used by income verification services, as they can be used to verify deposits, withdrawals and balances.
These are just some of the methods employed by an income verification service to confirm an individual’s income.
There are several reasons why income verification is essential. For example, lenders like banks often verify income to determine an applicant’s loan repayment ability. In contrast, a landlord may verify income to determine whether a potential tenant can afford their monthly rent payments. As for employers, they may need to verify a job applicant’s income to confirm their qualifications, confirm the accuracy of their application or ensure the applicant can meet their financial responsibilities.