What You Need to Know About Credit Privacy Numbers

This article will discuss credit privacy numbers (CPN), one of the latest popular tools used by scammers to rip off American consumers. The Federal Trade Commission has identified the sale of alternative credit identities as a scam. Many companies are selling these identification numbers under the false promise that a CPN can be used in place of your Social Security number (SSN) on a credit application. They advertise that a CPN can conceal a bad credit history and even bankruptcy. In this article, we’ll discuss what you need to know about credit privacy numbers and the reasons you should avoid using them. 

Credit Privacy Number, Credit Profile Number, Credit Protection Number

Obtaining new credit or a loan can be a difficult process if you have a low credit score. You may need a necessary item like a car that you can use for traveling to and from work. But many people can only pay for a car with credit or a loan. When you apply for a car loan, your prospective lender will research key details about your creditworthiness. These details are contained in your credit report. 

Lenders pull your credit history and credit score with a personal identification number. While this is typically your Social Security number (SSN), the lender can use another method to identify you. Why? There is a gray area in the U.S. Privacy Act that says consumers do not have to provide their SSN when it’s not required by federal law. And federal law does not require an SSN to be revealed when an applicant is apply for credit. 

Many companies have used this gray area in the law to promise that consumers can use a number other than their Social Security number to apply for credit. This number may be referred to as a credit privacy number, credit profile number, credit protection number, or CPN number. Regardless of what it’s called, CPNs are nine-digit numbers formatted like a Social Security number that are created to be used in place of an SSN.

Companies market CPNs to consumers who have bad credit with the promise that they can conceal their unfavorable credit profiles. Unlike a check of your SSN, a credit check of a credit privacy number won’t reveal your true credit history when you apply for new credit such as an auto loan or credit card. 

Is the CPN a Real Identification Number?

There are different types of personal identification numbers (PINs). 

• A Social Security number is a nine-digit number that the federal government, through the Social Security Administration (SSA), issues to most citizens born in the United States. Social Security numbers are also issued to eligible U.S. residents who file applications with the SSA. These numbers help the SSA identify and accurately record your covered wages or self-employment earnings throughout your lifetime. 

• An Individual Taxpayer Identification Number (ITIN) is a number issued by the Internal Revenue Service (IRS) to process taxes. Individuals required to have a U.S. taxpayer identification number but who are ineligible for Social Security numbers or Employer Identification Numbers (EIN) may be issued an ITIN. ITINs generate billions of dollars in tax revenue since they ensure that people pay taxes even if they do not have a Social Security number and regardless of their immigration status.

• An Employer Identification Number (EIN), also known as a Federal Tax Identification Number (TIN), is used to identify a business entity. Most businesses are required by law to have an EIN.

The biggest risk when buying a CPN is that it might be a real SSN stolen from a deceased individual, a senior citizen, a prison inmate, or even a young child. Using a stolen SSN as your identification number is identity theft. Companies that market credit privacy numbers, as well as a new credit score, are often in the business of selling stolen Social Security numbers.

The law permits only the original holders of any number to use it. This includes a Social Security number marketed as a credit privacy number. While federal and state laws restrict the use of SSNs, as mentioned above, gaps and technicalities in the U.S. Privacy Act and other laws remain. But even if you buy a CPN that does not belong to any person, it’s illegal to use this number to create a new credit profile.

Watch Out for Scam Tactics

Poor credit can create all kinds of personal finance problems. It may be difficult to get even a low-limit credit card. This could make anyone desperate to repair their credit. Scammers that sell CPN numbers target this desperation in consumers. They hope for and thrive on people with low FICO scores and poor credit histories. Scams advertising credit repair are common. These companies target consumers in financial distress, lure them with false promises, and charge them thousands of dollars. 

There are many red flags to watch for if scammers contact you. It’s probably a scam if there is a large fee for repairing your credit. It’s a scam if the credit repair company’s services include giving you a new credit profile with a new identification number. Some companies will try to lead you into creating a new but false identity for credit purposes without your knowledge. They may require you to enter a different address or phone number and tell you this is to protect your identity.

What they need is information that isn’t in your real credit profile so they can create a new credit profile. This different personal identifying information will be linked to your new, but false, credit profile. Just like your SSN, primary address, and primary phone number are linked to your real credit profile reported by the credit reporting agencies, Equifax, Experian, and TransUnion. 

Even though new Social Security numbers are not easy to get, the SSA never charges a fee when it assigns a new SSN to any person. The sole purpose of credit repair companies advertising that a CPN number can help you obtain better credit is to charge a large fee of hundreds or even thousands of dollars.

Using a CPN Could Cause More Problems Than You Bargained For

It’s very difficult for anyone to get a new Social Security number. The Social Security Administration will only issue a new SSN under specific limited circumstances. You must show proof of your identity, age, and citizenship or immigration status when applying for a new number. The SSA will only issue you a new number if you have ongoing problems with identity theft, you’re being harassed or abused, or you’re in grave danger when using the original Social Security number. It will also issue a new SSN if yours was assigned to more than one person. 

As mentioned, using another person’s SSN as your own PIN is identity theft. It’s also a federal crime to:

• Lie on an application for a loan or other credit

• Misrepresent your Social Security number

• Obtain an EIN from the IRS under false pretenses

Risking fines and jail time by using a CPN number is unnecessary even when you’re desperate. There are many legitimate ways to rebuild your credit. Check your credit reports regularly for any signs of fraud or inaccurate information. Look for derogatory marks like late payments or charge-offs. Dispute any information that you believe is incorrect. 

Other ways to rebuild your credit include making payments on or before the due date every month. A long history of on-time payments positively affects your credit score. Also, keep your credit utilization rate as low as possible. Using a large portion of your available credit can hurt your credit score. While these actions can’t change your credit score overnight, they will provide positive benefits and prevent you from the pitfalls of using a CPN.

The Credit Repair Organization Act (CROA) is a federal law that makes it illegal for credit repair companies to lie to consumers about the services that they provide. It also prohibits credit repair companies from:

• Charging you before they've performed any services; 

• Asking or even suggesting that you mislead any of the credit bureaus about your credit profile; and

• Asking or suggesting that you alter your identity to change your credit history.

The CROA, enforced by the Federal Trade Commission (FTC), requires these companies to explain to you and every consumer:

• Your legal rights in a written contract;

• A detailed account of the services the company will perform;

• The length of time it will take to get positive results;

• Your three day right to cancel without any cost;

• Your total cost; and

• Any guarantees they’re making.

Let’s Summarize…

Bad credit can cause financial problems and a lot of stress, frustration, and depression. Concealing your true credit history with a credit privacy number, also known as a CPN, is not a legitimate credit repair tool. It is a scam, not a solution to financial distress and bad credit, and it can result in serious consequences. 

CPN numbers are expensive. Some of these so-called credit repair companies charge thousands of dollars for a CPN. If you can afford a CPN, you can afford debt-relief options like a credit repair or debt management program. You can also use the money that you would spend for a CPN to consider other debt-relief options like debt settlement or debt consolidation. There are many better alternatives than buying an expensive and potentially illegal credit privacy number. There are much better ways to improve your credit profile.