The car you’ve dreamed of owning is almost within reach after years of wishful thinking. You have a clean credit history and an excellent credit score. You’ve calculated your income and expense and have come to the conclusion that with a little scrimping the payment is doable. Now, the only thing standing in the way of you and your dream is the loan approval. As you fill out the application that demonstrates your ability to pay, you begin to be doubtful about how your level of income looks on paper and you’re tempted to fudge the number higher. It’s such a little thing; no harm will come of it, right?
Wrong. Lying on a credit application purposefully is fraud and a violation of federal law. You could find yourself facing criminal charges and up to a $1 million fine and/or 30 years in prison. While it’s true that banks don’t typically pursue legal charges over violation of the terms of an application, the potential criminal judgment is so great that consumers shouldn’t take the chance.
Do you know someone who has provided fraudulent information and gotten away with it? Don’t try it! Banks have not only tightened their loan requirements but now delve deeper into an applicant’s credit history and are more willing to take action against a bad loan that was approved on false pretenses. Once they find the fraud on an application they can immediately cancel the loan.
The final step in the approval process may not be completed until after you’ve driven away, but if the bank determines you don’t have adequate income or are overwhelmed with debt that you failed to acknowledge, don’t be surprised to have your new car repossessed. Not only will you lose the money you put down, your credit report will include auto repossession and a fraud report.
While it may be true that it’s getting harder to qualify for a car loan and lying on the application is tempting, the damage to your credit will be extensive, if you get caught. As a result, the car of your dreams will be even farther in the distance, if you can ever recoup from the fallout that may come from lying on a credit application.