Borrowers looking for cheap loans should avoid lying on credit application forms, according to new advice from the UK fraud prevention service.
Cifas, which has 260 member organisations across the banking, finance and loans sectors, has said that falsifying information on applications for personal loans will not give borrowers any clear advantages. Instead of enhancing a credit application, lies can deter lenders from granting products to consumers.
Withholding information about County Court Judgments or lying about income will be "counter-productive" for Britons hoping to get fast loans, explained Cifas chief executive Peter Hurst. He claimed that due to fraud data sharing, lenders can tell when borrowers tell lies to cover up a bad credit history.
"Those who think that lying on application forms will give them any advantage need to realise that their efforts are counter-productive", he commented. "Fraud data sharing means that such lies are easy to detect and, far from enhancing an applicant's chances, will be detrimental to their application".
The advice from Cifas follows research from the service which revealed that two-thirds of those who lie on applications for secured loans, insurance and credit cards are men, with the majority of application fraudsters aged between 26 and 40.
Some 64 per cent of these men withhold the truth in a bid to conceal a poor credit history, compared to 77 per cent of women who state this as their main reason for fraudulently filling in applications. Of the women that do lie to conceal their previous credit history, 17 per cent use an alias, with ten per cent of all borrowers admitting to using a false document to support untruthful claims in applications.
Meanwhile, nine per cent of men and seven per cent of women bend the truth about their employment status or salary details. South-east London was named as the "residential hotspot" of fraudulent applications for secured and personal loans.
However, Mr Hurst remains clear in his advice, suggesting that no matter what the truth is, it is best for borrowers to be honest with lenders. "Telling the truth, even if it is slightly less palatable, remains the best policy", he concluded.
In related news, insurance firm Direct Line recently reminded consumers to be "open" and "honest" when applying for travel insurance, as withholding information about pre-existing medical conditions can invalidate cover and lead to expensive bills for overseas treatment.
It was recently revealed by data protection service Garlik that 33 per cent of Britons do not know what a credit history report is used for. A third of all borrowers do not realise that credit lenders use the financial profiles when deciding whether or not to grant personal loans to customers.
The findings from Garlik also revealed that just under a quarter of Britons have checked their personal credit profile over the past five years, with younger borrowers more likely to be unaware of the existence of a credit file and what the information is used for.
