Can you lie on a credit card application? Credit card providers utilize the data on the application form to evaluate your creditworthiness and determine the best level of credit to offer when choosing you as a possible customer.
Your job status, income and expenses, and prior debt payback history are examples of this information. They will review your credit report and other information to determine the risk you pose to them and whether to approve your application.
Can You Lie On A Credit Card Application?
Applying for credit is a relatively simple process. Following your application, the lender will review your credit report to assess your borrowing risk. But how big of an impact does your application have, and can a robust application overcome poor credit? Can you lie on a credit card application? Can you get a new credit card by lying? What to anticipate if you lied on a credit application is given below.
The Long Response
Your credit report is crucial when applying for any credit-related items. Even if you earn hundreds of thousands of dollars annually, you will only be accepted for something if your credit score is good! Therefore, it will all depend on what the lender sees on your credit report, even if you lie on your application for new credit.
Fraudulent Credit Application
If you lied on your application, could you face the consequences? Yes, technically. Fraud is defined as lying about anything having to do with money or business, yet, this term overstates the seriousness of the offense. A Canadian credit card provider is unlikely to disclose an application-related problem. Before processing your application, a credit card provider may request proof of the information if they think you are lying. Only your income is worth lying about on your credit record, and if the lender suspects that you have, they can request to view your most recent tax return or pay stubs. You can always refuse their request if you are unable to deliver these documents without incurring any more obligations. The lender will probably throw away and disregard the application.
Why would you lie on your application, exactly?
The banks’ lending requirements have been stricter in recent years, making it more challenging for individuals to obtain credit. You could be tempted to lie on the application if you’ve previously had trouble getting a loan or think your current income isn’t enough to qualify for a credit card, but this is a bad idea.
Lying on a credit card application is against the law, and you risk being charged with fraud if it turns out later that you find yourself unable to make your payments. You are giving misleading information about your financial and personal status, which credit card companies rely on to make risk-aversion choices.
The Credit Card Application
You must supply various financial and personal details on a credit card application, such as your salary, work status, and an accounting of your monthly expenses. So how may purposefully giving misleading information impact you?
Checking your credit report is one of the critical steps in a credit card company’s due diligence procedure when determining your suitability. This credit report contains information on your past unpaid and current bills, so the lender can tell if you lie.
If you are unemployed, you are ineligible for a “normal” credit card. Therefore you may be tempted to lie on an application form about your employment status. The issue is that, even if your application is approved and you are receiving state benefits, you will probably rapidly find yourself in over your head in debt.
Companies that issue credit cards don’t give them to people under the age of 18, and others are hesitant to give credit to persons above the age of 65. Your credit file contains your date of birth, so lenders can immediately verify this information.
Using someone else’s information on your credit card application constitutes identity theft, which carries severe financial penalties and the possibility of fraud charges. It is a significant matter that will impact other aspects of your life, even if done with the other person’s knowledge.
Lenders Are Considering Fraud Prevention Issues.
Any lender’s top priority is to prevent fraud, and using fraud databases is standard practice. A Cifas (Credit Industry Fraud Avoidance System) “application fraud” marker may be added to your credit report due to lying on an application because financial services businesses share data.
It can be challenging to determine which credit card issuers belong to the same organization. This implies that if you submit more than one application, your data may be compared to those of an earlier submission from the same group.
No matter how much money you make in the future, you will irreparably harm any chances you might have of getting credit in the future. Lenders can swiftly determine an overview of your financial capacity thanks to technological advancements and the information you submit on application forms.
Does your lender check the details of your debt and income?
Federal law prohibits lenders from extending credit to a person without confirming that the applicant can pay back the debt. For this reason, credit card applications typically request information about your income, employment history, and the mortgage or rent you currently pay.
Such information might be subject to a verification request from the credit card company after some time. The truth is that substantial differences are far more likely to set off alarm bells than “fudging.” For instance, you have a more significant risk of being discovered if you declare $10,000 in income on your tax return and $90,000 on your credit card application than if you claim $10,000 and $12,000, respectively.
However, credit card applications and underwriting procedures have become increasingly complex. Lenders — particularly those with whom you already have accounts — can easily sift through your application for any complex data.
Additionally, every lender can easily examine your account even after you’ve been accepted.
There’s a potential that your name will be flagged in their system if you falsify it on your credit report. This implies that you will only be approved for a credit card from this company if your credit score rises.
Lying on a credit application wastes both your and the lender’s time. Building your credit score is the best way to increase your chances of receiving credit. All you need is a little resolve and discipline, which can be done swiftly and efficiently. A secured savings loan is an excellent place to start if you’re ready for higher credit—no need to lie on your application because almost everyone gets approved.
What happens if you are discovered to have lied on a credit card application?
Lying on a credit card application can be an expensive error because doing so constitutes fraud and is punishable by penalties and prison time of up to $1 million.
A guy was found guilty of bank loan application fraud in 2012 after being charged with filing false tax returns totaling $12,488 and several credit applications totaling $90,000-$122,000 years earlier. He wasn’t given a $1 million fine or a 30-year prison term, but he was ordered to pay a fine of approximately $50,000 and was given time served and supervision after his release.
And remember that even if a lie isn’t exposed right away, it still might come back to haunt you. After all, if you feel the need to embellish information on a credit card application, it’s probably because you can’t afford the item. Additionally, it can easily become a pile of pricey debt if you can’t appropriately handle a large credit limit. (Credit card APRs typically range from double digits to more.)
Even worse things are possible. Credit card companies and other institutions will investigate your inability to pay if you are so heavily indebted that bankruptcy is your only alternative. They’ll ask you for a ton of information, and if it doesn’t support what you said in your first application, it might land you in legal trouble.
What to do instead of applying for credit card application with lies?
Before lying on your application, you should consider these other legitimate and worthwhile solutions.
Use a cosigner
You can put your spouse’s information on your application with some credit card firms. This will raise your overall revenue and can mean the difference between getting accepted or denied.
Obtain permission to use someone else’s account
You can also pick a different dependable person who is willing to enroll you as an authorized user, has a good credit rating, and is trustworthy.
Get a secured credit card by applying.
Since a secured credit card employs collateral to ensure you don’t take on more than you can handle, it has a higher acceptance rate. If you apply for a secured credit card, you could have to pay a down payment that serves as your credit limit and initial deposit. After that, you use your credit card as usual to pay your monthly bills.
Consider a revolving line of credit as an alternative to a credit card with a large credit limit. You never get mired in debt that you can’t pay back since this is a constant cycle of credit that you may utilize again as you pay it off.
Credit line for home equity (HELOC)
If you are a property owner, you can use the equity you currently have to obtain the required credit. Similar to a line of credit, a home equity line of credit uses the value of your home as security.
The Conclusion – Can You Lie On A Credit Card Application
Can You Lie On A Credit Card Application? It is never acceptable to lie on a credit card application; even if you get away with it, there could be severe repercussions. Credit card companies set certain limits to prevent you from taking on more debt than you can handle.
Even if you cannot obtain precisely what you desire, there are many strategies to build credit to be able to purchase what you require at a price you can afford. To make your application more appealing to potential creditors, make all your credit card and loan payments on time. It would help if you also aimed to reduce your debt-to-income ratio.
You still have several options if you still need to be approved for your desired credit card.
Have you ever thought of making a credit application false? Comment below and let us know!