Lie on a credit card application

Having access to credits opens up new purchasing opportunities and financial options, but you must first qualify. Your income and credit history are factors that determine the credit you can receive from a lender, and sometimes financial demands may not match reality.

It’s fascinating to develop the truth when filling out your credit card application. This will allow you to get a better home, a new car, or a bigger loan, but lying in a credit card application will have serious consequences. Not only that, but if you can access and use credit restrictions that you can’t repay enough, you will ultimately be able to pay your debts.

How credit card applications work

When applying for a credit card, lenders will ask you to fill out a form that includes personal and financial information. By filling out the form, you will provide your lender with a snapshot of your current and past credit history. The issuer will determine whether you qualify for the card and, if so, use it to set APR and credit limits.

Before approving an application, lenders will consider the following details:

Based on these details, the lender can assess your financial position and determine your likelihood of repaying what you borrow.

What happens if you lie to an application?

A credit agreement is a legally binding document, whether completed online, in person or over the phone. When applying, you must prove that the information you provide is correct. Otherwise, you may face serious penalties.

Adding false information to your credit card application is a form of credit fraud.

• Cannot file bankruptcy or claim debts
• For immediate repayment of the loan
• Gets fined up to $1 million and criminal charges punished in prison for up to 30 years
• Can’t secure future credit or loans

If you are not caught, lying in the application will not directly affect your credit score, but it can promote irresponsible financial habits. For example, if fake income leads to a credit limit beyond your means, you may be tempted to spend more than you can repay. This type of behavior leads to considerable debt. This liability becomes out of control and if you skip payments or defaults, it will negatively affect your credit score.

Will the lender check my information?

It doesn’t take every bank to see the details of the application.

For example, same-day loan lenders don’t have the time to invest in a detailed investigation. Many of these lenders don’t even perform hard credit checks and instead choose soft pulls (if any). It’s easy for misinformation to slip through the cracks. Typically, lenders only pull credit information if they are dealing with larger loan requests.

The digital age has made the screening process smarter and more efficient. Today’s latest banking software has built-in features that can detect irregularities in client data and flag potential fraud before it occurs.

How did you notice that you are lying in a credit card application?

The Credit Card Accountability, Liability, and Disclosure Act of 2009 (commonly referred to as the Card Act) provides better protection for lenders by clarifying the parameters regarding credit card applications and disclosure of personal data. The law places additional pressure and liability on banks to procure the correct type of details from their customers before pressing the “approved” button.

Your bank can come to you at any time for the life of your account and will renew your income proof as part of your annual credit screening. Providing this evidence can be inconsistent with the income disclosed in the application. This will encourage publishers to begin their investigation.

If you are unable to repay the debts obtained from the credit limit beyond your means, you may have no choice but to file bankruptcy. Bankruptcy can be a big red flag for lenders who want to know why they can’t meet their repayment terms. Once submitted, the lender is likely to begin the investigation and will need to submit detailed financial data, including proof of income. Proof of that income will refute the false information you enter in your credit application and provide the investigator with the evidence necessary to pursue a legal charge against you.

What counts as income from credit applications

Financial institutions consider various sources of income when evaluating their applications. Eligible sources include regular pay and wages, bonuses, tips, fees, interest and dividends, retirement benefits, public assistance, and even payments of alimony or child support.

The bank can also consider the income you have reasonable access. For example, a joint account with regular deposits to share with others. Banks may count those deposits as part of your income, even if they belong to others. For example, if you are a home parent and do not generate income personally, you can still claim household income on your application if you are 21 years old or older.

Applicants ages 18 to 20 are even stricter in income requirements and are unable to claim household income even if they are married and shared accounts.

In any case, you need to exclude inaccessible income, such as wages and certain tax liabilities. It is important to accurately report your income in line with bank guidelines to avoid potential consequences.

Alternatives lying in credit card applications

Rather than lying down in the application, consider these other options that are legal, effective and responsible.

Become a certified user with someone else’s account

You can also choose a trusted party with a great credit score and doesn’t mind adding you as a certified user. Doing this will allow you to get your credit card faster, establish a strong credit history and enjoy the benefits of great credit regardless of your score. Don’t forget to become a certified user with someone you trust to handle your cards responsibly. Their financial actions on the card can have a positive and negative impact on your credit.

Apply for a secure credit card

A secure credit card offers a higher approval rate as it requires collateral to avoid chewing more than you can. When you apply for a protected credit card, you will usually borrow an early security deposit, which also serves as a credit limit. Then, use your credit card to make monthly payments like normal.

Credit Line

Instead of a credit card with a higher credit limit, you can explore a rotating credit line instead. This is a continuous credit cycle and can be reused as you pay it off, so you won’t be buried in unpaid debts.

Home Equity Credit Line (HELOC)

If you own your own home, you can take advantage of your existing fairness and get the credit you need. Home Equity’s credit line is similar to the credit line, but uses the home as collateral.

Conclusion

You never lie to your credit card application. You may not be able to get caught, but if you do, the consequences may be serious. Additionally, credit card companies have certain restrictions based on their financial situation, which can protect you from taking on more debts than you can handle.

There are many ways to build your credit, even if you don’t get exactly what you need with a credit card. Make sure you pay all your credit card and loans on time and work on the debt-to-income ratio to make your application more attractive to potential creditors.

If you don’t qualify for the credit card you want today, focus on improving your credit through the available paths. If you have responsible habits, you will proceed your path towards the cards you want in the future.