Q: What’s the worst that can happen if I decide to exaggerate my income on a credit application?
— Risky Business, Toronto
A: Don’t ever kid yourself that distorting the truth on a credit application is comparable to telling a little white lie, says Sameh Elrefaei, head of personal lending at BMO. Whether you’re applying for a credit card, a mortgage or store credit, every credit application goes through a verification process that includes a review of a person’s credit history, as well as income and employment verification. So any fabrications will be found out, and the consequences of your actions will depend on the severity of the situation, says Elrefaei. In minor cases where income is only slightly exaggerated, you may still be approved for a smaller loan amount. But in more severe cases, or for repeat offenders, the financial institution will contact authorities and you could be charged with fraud—a serious offence that can lead to a fine and even jail time.