Many people lie on their credit apps, but it is a stupid thing to do. Credit limits are only partially based on your income; they also factor in other limits extended to you by other credit lenders, and your credit history.
What will happen? The lender at any time has the right to verify the information provided. Usually they do this by requiring you to allow them to pull your taxes for the past 2 years. If it doesn't match up - they will most likely cancel your account immediately. Legally, you are gaining credit by providing knowingly fraudulent information. The company would have a legal basis to stand on, but there isn't likely anything to act on.
Starting Score: 627 EQ, 621 TU - 11/15/08
I agree that in the normal situation if they found out about it, they'd probably just close the account down. But I would also think this could become a much bigger problem for you down the road if you ever ran into trouble with that account. Let's say you lied and got a $20K limit where they might have only approved your for $2K. What if you lose your job next year and run that card up to the max and eventually default and they have to charge it off. There might be more impetus for the company to seek prosecution for you having lied on the credit application in such a scenario. I'm not saying I know of this happening. It just seems that there are too many ways such a thing can come back to bite you that it's not even worth considering. Especially when there are so many ways that people of modest incomes can get decent limit cards. Credit unions are generally a lot more generous than the big banks.
Keep in mind that the courts can reject your petition to seek relief of your unsecured debts via bankruptcy if you provided false information that lead to the overwhelming debt in the first place. If you make $30k a year, would you really want a $20k credit line that could take you decades to repay? Credit lines are still pretty generous even with low incomes.
@Anonymous wrote:Hi guyz,
Other day I was talking to my friend and he said when you apply for a new credit card you could put false personal income (more) inorder to get the higher credit limit, means If I put low personal credit income which I have, I'll get very little credit limit so he was suggestion just put more and you'll get high credit limit.
My question is, I really don't wanna do anything like that but If somebody does that would that person get high credit limit and won't face any charges any penalties ?
People do that ?
Please show your thoughts.
Regards.
Knowingly putting fraudulent income information on an application then signing your name to it is a serious offense. You could be in for some heavy criminal and/or civil charges if such fraud is discovered and a significant amount of money is involved.
Best bet: Put the idea out of your head forever. When they subpoena copies of your tax returns and pay stubs, it will be difficult to argue "I made a mistake" in your defense.
I'm sure so many people do it, it's a surprise that banks don't require W2's. You should be fine rounding off a bit and most say "household income" which is anyone that lives in your home. These are reasonable ways to communicate a larger HHI without misleading the creditors.
So if the app says "household income" which most do, then your supposed to put everyone in the house's income combined, including your parents? Somehow I don't see that making sense but if that's what your supposed to do then I can do that.
They provide a disclaimer that while it is household income, to only include incomes that you wish the lender to factor in when they evaluate your ability ro repay. I don't know much further, never understood it personally either.