Are you worried about lying on credit card application forms? You should be!
Unlike that time you put your fingers into the cookie jar and got a slap on the wrist as a youngster, lying to credit card companies can lead to bad outcomes because it is 100% illegal.
Here’s what you need to know before you are tempted to fudge the numbers…
Are You Tempted to Lie About Income Earned?
Lying on credit card application income forms is tempting.
Boost your salary a smidge and a credit card company may offer you more credit.
Round down those student loans, auto loans, home loans, or personal loans and you could get access to even more spending power.
With a higher credit limit, you could buy that brand new Cartier watch or Louboutin shoes.
It doesn’t take much for the mind to drift off to a dreamy world of new, luxury goods.
Heck, if you get approved for enough credit, you might even be able to swipe your card and drive away in a new BMW – no more Ubers!
But before plunging head first into the deep waters of credit card debt, step back for a moment and consider the consequences of lowering your actual cost of rent or increasing your true salary on credit card application forms.
Why You Should Not Lie On Credit Card Applications
Sure, it’s tempting to inflate your income a bit to nudge the odds in your favor of getting approved for more credit. But the risks of lying on credit card application forms are grave.
Worst case, you could be slapped with a $1,000,000 penalty for lying on credit card application forms and be sentenced to 30 years in prison.
Credit card companies view lying as outright fraud and take it very seriously.
The reason is obvious. If you are not approved for a higher amount, it is because you most likely cannot afford the compounding costs of credit card interest.
Credit card issuers run calculations to assess the statistical likelihood that customers will pay them back.
When an application is denied, it is because the credit card company crunched the numbers and assessed the risk of delinquency or default to be too high.
> Related: Find Out Your FICO Score
By attempting to skirt the rules, you take on a great deal of risk. You are essentially betting that you are the rare customer who can defy the odds.
Much like the majority of people who think they are a “better-than-average” driver, so too most people may believe that they will be the customer for whom the rules of statistical analysis don’t apply.
But the laws of mathematics are likely to catch up with you if you run the gauntlet of misreporting financial data, so the best advice is to stay honest and jot down accurate figures.
If you earn $80,000 per year and report $83,000 it’s probably not going to have a big impact one way or the other (but you still shouldn’t do it!). However, if you earn $22,000 annually and report income of $83,000 annually, you are asking for trouble.
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The Power of Credit Card Companies
Even if you understand the penalties associated with credit card application fraud and are still tempted, consider this…
When you apply for loans or credit cards, banks and providers have every right to ask for documentary evidence to support your income and debt claims.
If you think you can submit salary levels and debt amounts at will because you think those numbers will never be checked, you may be right.
But you may be wrong!
All it takes is for your bank or credit card provider to demand actual bank statements or loan statements for you to be exposed.
And that’s when the proverbial house could come crashing down because once you’ve been found out the dominoes could fall.
In the past, applicants who have been caught lying have been subjected to stiff penalties so there is no reason to think you could escape the long arm of the law.
Even if you get past the application stage and think you are free and clear, creditors can examine your financial situation at any time.
Over time the risks increase and the likelihood of getting away scot-free diminishes.
Worst case if you had to declare bankruptcy, you could still be exposed when legal representatives compare your tax filings with income claims and spot mis-matches.
The bottom line is the risks are simply not worth the rewards.
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How To Increase Your Credit Card Limit
If you are tempted to lie on credit card application forms, it’s probably because you want to boost your credit card limit.
To do so legally without resorting to false statements, strive to increase your credit score.
If you have a fair credit score or bad credit, the odds are against you receiving approval for a high credit limit.
To be approved for high-end cards like the Chase Sapphire Reserve℠ card, you will generally need good → excellent credit.
The best strategy to boost your credit score and ultimately gain access to more credit is to demonstrate financial responsibility to creditors.
Pay your balances off each month if you can afford to do so. Make timely payments when bills are due. And be careful of how much credit you use.
When you use more than 30% of your credit limit, you risk being penalized with a lower credit score. High credit utilization is viewed dimly because it suggests that you may be struggling financially to keep your head above water.
Stick to the basics of financial responsibility and you stand a better chance of receiving approval for a higher credit card limit the legal way.
Have your ever been tempted to lie on a credit card application income form? What did you decide to to? We would love to hear from you.
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