You may have heard of credit privacy numbers, or CPNs, that are marketed to consumers to use instead of a Social Security Number, or SSN on applications for credit. But what do you really know about these numbers? If you’re considering purchasing a CPN, you will want to read this.
Understanding the credit privacy number (CPN)
A credit privacy number, also referred to as a CPN, is marketed as a nine-digit personal identifying number that you can use, in lieu of your social security number, to help protect your privacy on certain credit documents.
However, regardless of how they’re billed, we’re here to tell you that credit privacy numbers are trouble. First and foremost, they actually don’t even really exist. According to the Federal Trade Commission, there is no such thing as a credit privacy number. And what’s more, if you use ANY number in place of your own Social Security number on an application for credit, you are actually committing a federal crime.
While that may seem like enough to persuade you from using one, but for those who have bad credit and are in desperate need of a loan, or line of credit, they may seem like a saving grace. In this article we discuss credit privacy numbers, including what they’re designed to do, why they are a bad idea, and other tips for maintaining your privacy and helping protect yourself from becoming a victim of identity theft.
Why should I know about credit privacy numbers?
While credit privacy numbers are commonly marketed to consumers, that doesn’t make them a great solution for starting over or rebuilding your credit. In fact, it’s been proven that you are better off sticking to the tried and true methods to work toward improving your credit score.
Are there dangers to using a credit privacy number?
Even though credit privacy numbers are marketed as a safe and convenient alternative to using your Social Security number, there are actually some serious dangers involved in the use of credit privacy numbers. As we mentioned earlier, filling out any number other than your own Social Security number on a credit application is a federal crime.
Additionally, some credit privacy numbers that have been sold were actually dormant SSNs that either belong to individuals who are recently deceased or already belong to children — getting you tangled up in identity theft. No matter what those companies say, trying to use a credit privacy number in place of your Social Security number can land you in serious trouble..3
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Why do credit privacy numbers exist?
Originally, credit privacy numbers originated as a result of the US Privacy Act of 1974. The US Privacy Act established the rules on how federal agencies collected and maintained records of individuals. However, it is important to know that credit privacy numbers are not legitimate, nor are they recognized by the United States government. The only legitimate identifying numbers that are used by all of the 3 major credit bureaus are Social Security numbers, used to ensure that they are referencing the correct person.
Sellers of credit privacy numbers also typically encourage their clients to change their other identifiable information, such as phone numbers, addresses, and email addresses, so that the information doesn’t match up — another huge red flag.
So how can you avoid being a victim of a CPN scam?
How to avoid a credit privacy number scam
Though it may be tempting to find a quick and easy solution when you’re in financial trouble, the expression “if it sounds too good to be true, it probably is” exists for a reason. Keep an eye out for these signs that a company may be trying to scam you:
- The company tries to convince you that it’s perfect legal to use a credit privacy number in place of your Social Security number.
- The company instructs or recommends you to lie or change any other personally identifying information that could connect you to your credit report.
- The company tells you to use an Employee Identification Number, or EIN, to apply for credit.
- The company demands an upfront payment for a credit privacy number before doing any work for you.
- The company makes promises that you will no longer be connected to accurate negative information in your credit report.
- The company makes guarantees that you will be able to get new credit using the credit privacy number.
We talked to Credit Sesame member, Becky, about her experience purchasing a credit privacy number in an attempt to improve her credit score. Here’s her story — and what she wants you to know if you’re considering purchasing a CPN.
What are the alternatives to a credit privacy number?
If the information contained in your credit report is accurate, there is no legal way to “start over” with your credit. Fortunately, however, most negative marks on your credit report are not permanent. Almost all negative marks on your report diminish over time, meaning that they have less of an impact on your credit score as they get older. And, even better, they fall off of your credit report completely after 7 years, and no longer have an impact on your credit score at all.
- Make all of your payments on time, every time. Your payment history is the single biggest factor that contributes to your credit score, so it is important to make all of your payments on time. If you get behind, don’t just stop making payments — work with your creditors to establish a payment plan until you get back on your feet.
- Reduce your credit utilization. Your credit utilization, or the percentage of your total credit that you’re currently using, is another big factor in your credit score. To improve your score, try to always keep this number below 30% — in fact, the best credit scores often have a credit utilization of 10% or less.
- Consider adding or becoming an authorized user. The length or age of your credit history also has an impact on your credit score. If you’re just starting out with credit, consider adding an authorized user onto your account, or asking to be added as an authorized user on someone’s account with an established credit history. Both of these can lend instant credibility to your own credit.
- Look at your credit mix. Lenders like to see responsible uses of different types of credit on your credit report. If you only have credit card accounts on your report, consider adding a credit builder loan or an auto loan. Similarly, if you only have a loan on your credit report, consider adding a credit card to your profile.
- Limit the number of inquiries on your credit. Soft inquiries on your credit, such as when you check your own credit score, will never affect your score. However, a hard inquiry, such as when you apply for a new loan or credit card can — and will. While it likely won’t take a large hit, you want to keep your score as high as possible — so only apply for new credit when it’s necessary.
Key takeaways of the CPN
Credit privacy numbers, while marketed as a quick fix for credit, are a scam and a crime. There is no way to pay to improve your credit, or to erase your bad credit history. If your credit score isn’t where you want it, don’t despair. There are steps you can take to improve your score, regardless of what it is now. Do these things consistently over time, and your credit will take care of itself.