More people are deceiving lenders by lying on credit card and loan application forms, to try and cover up poor credit histories, according to UK fraud prevention service CIFAS.

Lies on application forms are up by 13% to 21,780 in the first three months of 2008 – from 19,239 in the quarter of 2007.

The most common lie was failing to reveal a previous address where the applicant had a poor credit history says CIFAS.

CIFAS chief executive, Peter Hurst says: “Because people are getting into debt earlier, and because the credit crunch has diminished their access to finance, they are now resorting to fraudulent applications for funds”.

Chiltern’s Nathan Gladwell says: “Lenders have risk assessment procedures in place to protect customers from overstretching themselves. Lying in this way could leave a borrower with more debt than they can realistically handle.

“Most information is shared between lenders too, so deliberately deceiving them in this way is counter-productive, as they’re less likely to be offered credit.

“What’s more, if the loan is to consolidate debts; almost two-thirds of people who consolidated with another loan go on to develop more debt anyway, so it’s probably better to seek an alternative way of addressing your debts – like an informal arrangement.”