Lying on a Credit Card Application – Does Your Lender Really Verify?
A credit card is a very useful instrument issued by a lending institution or bank. One can use this plastic money to buy almost anything or everything and meet payment liabilities of different sorts.
One, however, has to qualify to apply for a credit card and have it issued in his or her favor. The primary pre-conditions include your income status and record of earlier credits or loans availed by you.
Here, the repayment schedule to such credits becomes meaningful as you may not qualify to avail facility of credit cards if you had been a habitual defaulter or have not cleared the outstanding dues of the financial institution that lent you money.
A credit card is one of the best ways to meet immediate cash needs for sundry purposes. It is really helpful if you don’t have ready cash or are suffering from a cash crunch. Here, the credit card can come in good stead.
How Does a Credit Card Application Work?
The credit card application works in a routine way entailing, in the process, several queries by the lender and their factual answer. These queries must be answered with total factual accuracy as they can be verified at a later stage, if not immediately.
Hence, to play safe, one should be absolutely truthful in answering them. The first step is to fill out a form issued by the lending body. It has to be filled up giving relevant information about you and your income profile that usually include:
- Current income
- Previous income
- Previous or existing credit background/history
- Existing financial liabilities, if any.
These assessments are done to understand your creditworthiness, and repayment capability and understand if you can take the repayment burden if the credit card is issued to you.
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What Happens if You’re Caught Lying on a Credit Card Application?
In the event of being caught while lying, a person who has availed the benefit of the credit card may proceed for initiation of legal action which is usually harsh with a penalty in money terms and also jail term or both running concurrently.
In such a case, you are booked for credit fraud under the Federal Laws of the USA. Under the law, you may not be able to file bankruptcy to willfully default on the payment dues or avoid other related criminal charges.
What to Do Instead of Lying on a Credit Card Application?
Instead of lying on a credit card application, one should adopt the following measures:
Use a cosigner: If You Apply With a cosigner your creditworthiness increases: One is allowed to use a cosigner who can be your spouse to apply for a credit card as some commercial banks and lending companies allow it. This will help you to put the joint income with your spouse in a higher bracket facilitating your availability of the credit card.
Line of credit: This facility can be availed by one to get credit-line. Under this provision, a bank or lending company can allow you to draw a quantum of money as credit.
A secured credit card: This facility can be availed by those with low income or bad credit records. In both cases, the FICO scores will be at 629 or lower. The reason for this FICO rating emanates from the need to make a security deposit as collateral.
Becoming an authorized user: Someone can authorize you to use the credit card. The person can be your relative or friend.
Does your Lender Really Verify Income and Debt Information?
The lender or banking institution verifies all information furnished by you. Such verification may not take place immediately (even after the issuance of the credit card) but it will be done eventually. Some lending bodies may, however, check them before issuance of the credit card.
The lending institutions use various ultra-sophisticated software to check the facts of the customer who has applied for a credit card or might have availed of same-day credit in which case the fact-check is done later.
The wrong statement on the proof of income gets detected when fact-checks are done making one liable to legal actions. Similarly, the debt information is also verified.
This is a wrong notion that many keep while applying for credit cards giving wrong information that the fact-checking will not be done. But a credit card holder cannot escape from it.
Is It a Crime to Lie on a Credit Card Application?
Yes, it is a serious crime for which you may be booked. In the USA, such a willful wrong statement or information may lead to 30 years of jail term or a cash fine of $ One million. If the gravity of such lying is very serious, both the punishments can run concurrently.
One who is applying for a credit card should know that the wrong information or willful lying may not be detected immediately but it can be detected after some time. The consequences can be of grave nature.
One should never lie as it can lead to a series of legal complications entailing further expenses such as a fee to the lawyer. But the lawyer also cannot probably save the client if the lies are a blatant and total travesty of truth.
We thus find that credit cards can really act as a friend to you. It can help you tide over immediate financial needs when you have a shortage of disposable funds. It can be an instant financial relief.
Regular payment of installments of credit card dues enhances your creditworthiness and reliability. The bank or lending institution can even increase your credit limit if they find you are sticking to the repayment schedule.
Hence, it is in your interest that you utilize your credit card for genuine purposes and furnish all information with total accuracy.