What happens if you lie on credit card applications to obtain credit?
July 6, 2017
When credit card companies make a decision about you as a potential customer, they use the information on the application form to assess your credit-worthiness, and establish the most appropriate level of credit to offer.
This type of information includes your employment position, incomings and outgoings, and your previous history of debt repayment. They will view your credit file and other information to assess the risk you pose to them, and make a decision about whether to grant your application.
Why would you lie on the application?
The banks’ lending criteria has tightened in recent years, making it more difficult for consumers to borrow. If you have previously struggled to obtain a loan, or suspect that your current income level is not high enough to be granted a credit card, you may be tempted to lie on the application, but this is bad idea.
Lying on a credit card application is illegal, and you could face prosecution for fraud if it comes to light at a later date, or you find yourself unable to keep up repayments. You are providing false information about your personal and financial situation, facts on which credit card providers rely on to make decisions that protect themselves from risk.
The application for a credit card
A credit card application requires you to provide various forms of financial and personal information, including salary, employment status, and details of your monthly outgoings. So how can deliberately providing false information affect you?
One of the main parts of a credit card company’s due diligence process when assessing your suitability is to check your credit file. All your current and outstanding debts are listed in this credit report, so if you lie, it will be obvious to the provider.
Being unemployed means you are not eligible for a ‘standard’ credit card, so you might be tempted to lie about your employment status on an application form. The problem is that if your application is successful, you are likely to face unmanageable debt very quickly, even if you are in receipt of state benefits.
Credit card companies do not offer cards to anyone under the age of 18, and some are reluctant to offer credit to people over 65. As your date of birth is included in your credit file, providers can quickly check this information.
Using someone else’s details on your credit card application is identity theft, carrying with it hefty financial penalties and potential prosecution for fraud. Even if it is done with the other person’s knowledge, it is a serious issue that will affect other areas of your life.
Fraud prevention issues to consider
- Prevention of fraud is high on the list of priorities for any lender, and the use of fraud databases is commonplace. Data sharing between financial services companies also means that lying on an application could result in a Cifas (Credit Industry Fraud Avoidance System) ‘application fraud’ marker being placed on your credit file.
- It is not easy to identify which credit card providers are part of the same group. This means that if you make more than one application, your information could be compared to a previous application within that group.
- You will damage beyond repair any future chances of obtaining credit, regardless of the level of your income in years to come. Lenders share the information you provide on application forms, and with advances in technology, can quickly obtain an outline of your financial capabilities.
Scotland Debt Solutions can provide more detailed advice that is tailored to your situation. We have been helping Scottish residents to escape debt since 1989, and offer an initial meeting free-of-charge.
If you’re worried that the council might take action against you for non-payment of council tax, entering into a Scottish trust deed can be a beneficial step. It stops legal action by all creditors included in the arrangement, and provides a ‘safe haven’ from which to regain control of your finances. As council tax arrears […]
A debt payment programme (DPP) remains on your credit file for six years, along with other default markers and court judgments that have been made against you. This can seriously affect your ability to borrow for this period of time, and longer. Even if you can secure borrowing, lenders are only likely to offer unfavourable […]
If you owe a debt of £5,000 or less, your creditor may send you a Simple Procedure Notice of Claim. This is a relatively new procedure that was brought in by the Scottish government and commenced on 28th November 2016 – their intention being to make it easier to resolve debt disputes. So if you’ve […]
A Bankruptcy Restriction Order may be made against you if it’s believed that you acted dishonestly, recklessly or unlawfully before you were made bankrupt, or during your bankruptcy. Your Trustee will inform the Accountant in Bankruptcy (AiB), and if their suspicions are upheld, a BRO of 2-15 years can be made depending on the seriousness […]
Debt payment programmes (DPPs) are an intrinsic part of the Debt Arrangement Scheme, which allows you to pay off unsecured debt at an affordable rate. If a debt payment programme is rejected by one or more creditors, the DAS Administrator can apply their discretion on whether to approve the plan, after using a test to […]
If you’re struggling to pay your unsecured debts, a debt payment programme could help you to regain control of the situation, and become financially stable again. Debt payment programmes are a fundamental part of the Debt Arrangement Scheme (DAS) in Scotland, and allow you to repay over a longer period of time. These programmes involve […]