People should avoid giving false information when making mortgage applications as this equates to fraud, it has been warned.

Neil Munroe, external affairs director at Equifax, believes first party fraud may be on the rise during the recession as people feel the need to bend the truth.

"I don’t think they think it through. I don’t think they connect all the various points up in the process and probably don’t realise that there is independent checking going on of the information," he suggested.

This could make it difficult for people to get credit in the long-run, Mr Munroe revealed, which could create debt management problems in the future.

Companies often share information on fraudulent activity, which could prove detrimental for anyone trying to access funds, Mr Munroe added.

KPMG reported in February that the value of mortgage fraud in the UK in 2008 stood at £36 million compared to £3.7 million in 2007.

It also revealed that 25 cases of mortgage fraud reached courts in 2008 compared to ten in 2007, yet the full impact of credit crunch on fraud is yet to be seen.