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A credit application on a laptop computer.

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A new survey has turned up some troubling findings: Nine per cent of Canadians admit to being "not entirely truthful" on an application for credit or a loan, and 10 per cent said they think that it's actually okay to inflate annual income when applying for a mortgage.

Those were some of the results of an online survey of 1,500 people that was done for Equifax Canada, a company that's best known for tracking consumer credit scores.

"Canadians are inherently hopeful," says Tim Ashby, vice-president of personal solutions at Equifax. "If you look at some of the broader data, people believe that in the future they will make more money and they believe that their homes will appreciate."

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Canada's banking regulator, the Office of the Superintendent of Financial Institutions, highlighted income verification when it issued new guidelines for mortgage lenders in 2012.

"A borrower's income is a key factor in the assessment of their capacity to repay the mortgage loan, and verification of income helps detect and deter fraud," the guidelines state. "This includes substantiation of employment status and the income history of the borrower. For borrowers who are self-employed, [federally-regulated lenders] should take reasonable steps to obtain income verification (e.g., notice of assessment) and relevant business documentation."

Mr. Ashby says he was surprised by the findings about lying for loans. "Making misrepresentations on a loan application is only going to get you in a situation where you have an inability to potentially pay back that loan," he says.

The survey for Equifax was generally about the threat of identity theft and safeguarding personal information, and the questions about lying for loans were an afterthought, Mr. Ashby says.

"We know that fraudulent use of information is on the rise, so asking that question was a no-brainer to us. We know that deliberate falsification of entire applications is happening."

Situations where criminals steal identities and use them to obtain loans are one thing. But those are likely not the people who were participating in the online survey, which suggests that there's a problem among the general population of loan applicants.

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