Is it okay to tell a little white lie on a credit card application? The answer is a resounding no.
It might seem harmless to exaggerate things on an application, but this is definitely not a good idea. Here's why honesty is the best policy when applying for a credit card.
Coming up next
Key takeaways
- Lying on a credit card application in Australia is considered fraud.
- Legal action can be taken against those who lie on their credit card application.
- It can be punishable with fines, imprisonment, or both.
- There are financial ramifications, too, that impact your credit score.
Why you should not lie on a credit card application
Here are 3 reasons why lying on a credit card application is a terrible idea, just in case there is any doubt.
- It can result in debt and financial hardship. Lenders rely on the information provided in a credit card application to assess the applicant's creditworthiness. Issuing a credit card based on false information can result in the applicant being unable to manage their debt, missing payments, damaging their credit score, and lowering their chances of being approved for credit in the future.
- The bank can find out. Information provided in an application is verified against what's in the applicant's credit report. Inaccurate or false information can be detected during the decision process, especially if there is no supporting documentation, such as payslips.
- It's against the law. Lying on a credit card application is a criminal offence and is considered fraud under the Criminal Code Act 1995. The consequences of committing fraud in this manner can include fines and imprisonment.
The consequences of lying on a credit card application
The act of providing false information on a credit card application to obtain a benefit or cause loss to another person is considered fraud and is punishable by a fine, imprisonment, or both under the Criminal Code Act 1995, Division 134—Obtaining property or a financial advantage by deception:
"Section 134.1 False or misleading information
(1) A person is guilty of an offence if:
(a) the person provides information to another person; and
(b) the information is false or misleading; and
(c) the person intends that the information will be used by the other person to:
(i) obtain a benefit; or
(ii) cause loss to another person.
Penalty: Imprisonment for 10 years."
Lenders can take legal action against anyone who provides false information on a credit card application.
There are also financial implications apart from the legal ramifications of lying on a credit card application. Apart from the potential of a large fine, this fraudulent activity won't look good on a credit report and will make it difficult to obtain credit in the future.
Conclusion
Honesty is the best policy, including when it comes to credit applications. Lying on your credit application may seem like a quick and harmless solution to meeting the minimum criteria, but it can have long-lasting and damaging consequences. Don't do it.
