How Do Banks Verify Pay Stubs

How Do Banks Verify Pay Stubs - What you need to know
Kristen Larson
By Kristen Larson
January 27, 2023
Time to read: 7 Minutes

Creating fake pay stubs is quite popular nowadays; even the most naive people attempt this. But banks do not just hand over loans or mortgages once you show the fake stub. Instead, they verify your income before providing you with any facilities. And for that, they use different methods. 

In this era, many businesses use fake pay stubs to get loans from banks, landlords to save themselves from tax payments, and tenants to get their desired property. 

But how does the bank know your pay stub is genuine? What is the verification process like? Read on for all the answers.

Can a Bank Verify Pay Stubs?

Can a Bank Verify Pay Stubs

Yes, a bank can verify pay stubs. It is a time-consuming process, but not impossible. The legal work for a fake pay stub requires a lot of steps and verifications. 

To open an account at the bank or get a credit card, a bank asking for a pay stub will be the first step toward your goal. Your pay stub will then go through different processes for the bank to verify if it is genuine. 

How Do Banks Verify Pay Stubs?

To verify a pay stub, it is first assigned to an employee, who then checks several points to check its authenticity. In the event of any errors, you need to be present and explain the reason for the mistake. The whole process of verification is mentioned below.

  • Check for mathematical errors

  • See if the font is the same throughout the document

  • Check if the zero (0) is an actual zero instead of an 'O'

  • Spot any rounded numbers

  • Match all the documents with W-2 and previous bank statements

How to Spot a Fake Pay Stub?

spot fake pay stubs

It’s important to know how to spot fake pay stubs. Having different types of financial information verified is important. It’s difficult, but there are ways around it. In most cases, you can spot a fake pay stub by going through it a couple of times. 

  • Check all Zeros

It is not very common, but it is likely to be found. A fake pay stub may have an 'O' written instead of a zero. This is one of the most common mistakes. 

  • Check the Font

One big mistake fraudsters make while creating a fake pay stub is to use a different font. This happens quite often if an amateur fraudster creates a fake document. 

  • Check for Rounded Numbers

It's very rare for a pay stub to have rounded numbers. After all the tax deductions, having rounded numbers on the pay stub is pretty difficult. This is the point where you must scan the document critically. 

  • Check the Math

Often, when you sum up the amount of each wage or tax individually, it does not match the final amount written on the pay stub. Therefore, you must check all the tax deductions, default income, and bonuses carefully, and if it still doesn't match, there's a chance it might be a fake stub. 

  • Match All Documents

The information on the pay stub must match other documents like the W-2, bank statements, etc. Therefore, you can tell a fake pay stub in case of a mismatch of information.

How Do Banks Verify Income?

For many reasons, banks verify a person's income. However, they use different methods, and each one requires a lot of documentation. 

The first method of verifying a person's income is to ask for their paycheck payment slips. Also, check all the income tax forms. You might also be asked to show bank statements. You might be wondering can fake bank statements be verified. Banks are vigilant with fake documents and fraud so they most likely won’t be verified.

Furthermore, utility bills and property documents are also used for the verification process.

How do Banks Verify Income for Auto Loans?

To verify income for auto loans/car loans, the process is almost the same as verifying pay stubs.

  • If you are a W-2 employee, the bank will ask you to provide the pay stub for the past three to four months. 

  • For someone who is self-employed, you will need to provide tax returns that mention all your business expenses. They will make a decision once they see everything is in order.

  • For unemployed people, several documents plus identity proofs are required. In such cases, the process is quite lengthy, and a positive result is not guaranteed. 

  • For tenants, the bank will calculate your debt-to-income ratio and ask for the same set of documents as W-2 employees. The debt-to-income ratio ensures you can return the money in time.

If you are wondering how do landlords verify pay stubs, the process is very similar to this. 

How Do Banks Verify Income for Mortgage?

Before approving a request for a mortgage, the bank needs proof that your property/money is truly yours. The verification process is different depending on the type of debtor, and you can get an idea of it from the following points.

  • The bank will ask for your pay stub and income tax returns from the past two years. It will also check if you are working in the same field or have been to different places. 

  • You will need the tax returns from the last year or two if you are self-employed. Furthermore, the bank may ask you to provide a profit-and-loss statement so they don't risk their money.

  • Lastly, if you are using a down payment to lower your loan-to-value ratio, you will have to provide proof of that money. You must provide the bill of sale if it is from a recently sold car. If you received it as a present, you need a gift letter to prove that the money is yours.

How Do Banks Verify Income for Credit Cards

How Do Banks Verify Income for Credit Cards

Banks set a limit on a credit card before issuing it. Therefore, they will first verify your income. They will require the last few months' payment paychecks for verification. 

Why Do Banks Verify Income?

Why do banks ask for pay stubs? The reason is pretty simple. People create false documents to get more money. So, before approving a loan application, the bank will have to verify your income. The same is true for credit cards, etc. It provides the lender with the surety that the debtor has enough income to repay the loan. 

Frequently Asked Questions (FAQs)

Why would someone fake a pay stub?

There are many reasons for someone to create a fake pay stub. For example, someone may lie about their income to rent a place or get a bank loan.

How can you tell a fake employment verification?

It can be difficult for an amateur to determine if an employment document is true or false. But the bank has experts for this purpose, who can scan documents in minutes, if not seconds. 

How would you fake a pay stub?

There are different ways to create a fake pay stub. One, you can create it by yourself. Two, use an online tool. Three, ask someone who is an expert in this work to create a fake pay stub in exchange for money.

How else might a bank verify your income?

A bank might verify your income by asking your employer, checking your social security statements, and through the IRS form 1040.

Is it a legal requirement to submit pay stubs when applying for a bank loan?

It depends on the state you live in. Submitting pay stubs is not a legal requirement for all states, but for some, it is. 

Do banks verify employment for personal loans?

Yes, banks do verify your employment. But in most cases, your pay stub is the only thing they verify.

Final Thoughts on How Banks Verify Check Stubs

Verifying a fake pay stub is very easy for banks, especially the bigger ones. And if you get caught with a fake pay stub, you can land in big trouble. Therefore, it is better to stay away from creating fake documents to avoid any mess.

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