Your One-Way Ticket to Jail, the Credit Privacy Number

After 24 years in the credit industry, you’d think I’d have seen it all by now but I still get surprised from time to time. Recently, a Credit Sesame reader asked this question:

“John, I have and have always had horrible credit. My credit reports have collections, late payments, defaulted accounts and my credit scores are all well below 500. I called a company that I saw online and they told me about Credit Privacy Numbers and how you can start over by establishing credit using that number instead of your Social Security number. Is that true?”

The question left me wondering how many of our readers might be thinking credit privacy numbers sound like an easy solution for getting around bad credit. I decided to debunk some of the myths surrounding these numbers and why you should steer clear of them when your credit is less than perfect.

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What is a Credit Privacy Number?

A credit privacy number, also called a credit profile number or CPN is nine-digit number that can be used to apply for credit. Credit repair companies tell you that you can have one of these numbers (for a fee, of course) and then use it to get loans or credit cards.

The theory is that since creditors are looking at the CPN instead of your Social Security number, your bad credit history wouldn’t show up on a credit check. Assuming you get approved for credit with a CPN, any new credit history you have associated with that number would be reported to the credit bureaus. Effectively, you’d get a clean credit slate without having to do anything directly to positively impact your credit report card or score.

Why credit privacy numbers are bad news

If you’ve got bad credit, you might be thinking that credit privacy numbers sound pretty appealing, but not so fast. There are plenty of problems that go along with using a CPN to set up a new credit identity for yourself.

First, the major credit reporting bureaus aren’t going to be fooled by a credit privacy number. The information that goes into your credit report is tied to your name and address but your Social Security number is also used to identify you.

According to TransUnion spokesman Cliff O’Neal, “TransUnion does not use these so-called CPNs; we accept and report SSN as an identifier. TransUnion has checks and balances in its systems if someone attempts to use these numbers in place of their issued SSN. For example, we provide alerts designed to help creditors discover if the number provided in the SSN field on a credit privacy number application is not a valid SSN, or is an actual SSN of another consumer.

The same goes for Equifax and Experian. According to an Equifax spokesperson, “Equifax does not issue or recognize CPNs as an acceptable form of personal identifiable information.” An Experian representative told us that, “Experian does not issue such a number (CPNs) and does not recognize them as valid.”

But wait, you might be thinking, I just want to get a loan and I don’t necessarily care about it showing up on my credit history. Can’t I still use a credit privacy number to borrow money? Technically, the answer is yes, but only if you want to risk a trip to jail in the process.

[Learn More: What is a Bad Credit Score]

Misrepresenting your Social Security number is a federal crime

According to the Federal Trade Commission, lying on a credit application and misrepresenting your Social Security number are both federal crimes. Even if you obtain a CPN from a company that looks 100 percent legit, you’re still breaking the law if you plug that into the Social Security box on a credit application. Bascially, you’re lying by omission by substituting a credit privacy number for your real information.

What’s worse, that credit privacy number you’ve paid so much money for could be stolen. Some credit repair companies are actually just recycling Social Security numbers that have been issued to other people and passing them off as credit privacy numbers to unsuspecting consumers. According to a report from the Federal Reserve, credit repair scammers will swipe Social Security numbers belonging to children, seniors and people who are incarcerated just for this purpose.

Using someone else’s Social Security number to get credit in your name is also a federal crime. Currently, the max penalty for identity theft is 15 years in prison, not to mention having to pay some substantial fines. That’s on top of any punishment you might get at the state level if you’re convicted of identity theft. When you put it in that perspective, it’s pretty easy to see why credit privacy numbers are more trouble than they’re worth.

[Learn More: Improve Your Credit Score]

Other credit shortcuts that can get you in trouble

Paying for a credit privacy number isn’t the only mistake you can make when you’re trying to undo any damage caused by bad credit. For example, there are companies out there that will tell you that replacing your Social Security number with an Employee Identification Number or EIN is an effective way to create a new credit profile. This is a nine-digit number that the IRS uses to identify businesses and people who are self-employed for tax purposes.

While you can use an EIN to establish credit in your business’s name, it’s not going to do you much good when it comes to your personal credit. Besides that, you need a Social Security number to apply for an EIN. Even if you’re trying to use it get credit for business purposes, creditors are still likely to look at your personal credit history at some point.

Getting yourself added on to someone else’s credit card account as an authorized user is another strategy that can backfire. Being an authorized user can be beneficial to your credit because it allows you to transplant the cardholder’s good credit history on to your own (for that account). Even better, you don’t have any liability for charges made to the card.

Going the authorized user route is a double-edged sword, however. If the primary cardholder defaults on the debt or they miss a payment, that negative payment history will show up your credit too. The same goes if they max out the card, which can affect your credit utilization ratio. The closer you are to your credit limits, the worse it is for your credit score.

There’s no such thing as quick fix for bad credit

There’s no such thing as a magic bullet that you can use to turn a bad credit score around overnight. The best way to see a positive change in your credit is to develop tried-and-true habits, starting with paying all of your bills on time each month. Payment history accounts for 35 percent of your FICO credit score, so being prompt with payments is a no-brainer.

The next thing you can do is pay down your balances. Thirty percent of your score is based on what you owe so chipping away at your debt should be your next priority. Aside from that, you should also avoid applying for new credit unless you really need it. Inquiries make up 10 percent of your score and every time you apply for new credit it knocks a few points off.

As far as the types you have credit you have are concerned, make sure you have a good credit mix. Creditors like to see that you’re responsible with different types of debt and this counts towards 10 percent of your score. Keep your old accounts open even if the balances are paid off and you’re not using them. The age of your credit history counts for the remaining 15 percent of your score and the older your accounts are on average, the better.

Remember, if something seems too good to be true it probably is. Banking on a credit privacy number to restore your credit status means you’re exposing yourself to some serious consequences in the long run.

[Learn More: Credit Cards to Build Credit]
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Published March 4, 2015 Updated: September 21, 2016
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Comments(6)

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tom•  July 24, 2016
If this. Cpn stuff is this illegal why are they available???
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Rio•  August 24, 2016
Whoever wrote this story...ONLY seem to be viewing the issue from a criminal standpoint. Celebrities use them...witness protection also. Every cpn isn't stolen, or have shadiness. I believe it's a persons intent that makes things look worst than they are.
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Moving Mountains•  October 14, 2016
Agreed! How can celebrities and government officials use it but if we do we're criminals?! The goal is not to lie about it and do not default on payments.
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Andrew•  October 4, 2016
How do you report someone who used a CPN to purchase a vehicle?
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Tomethia Ogletree•  October 14, 2016
Thanks a lot because I have been witnessing people talk about and use these CPN which of course caused curiosity to kick in. I believe in honesty and therefore will do it the old fashion way. My credit is terrible ; but I do want to make it better. Any other suggestions?
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Lindsey•  October 25, 2017
I agree with someone who says this writer is just showing the standpoint from a criminal view. There are MANY things in this world we can all get in some sort of "criminal" trouble from. Does this mean mam=y don't do it? No. I am always mystified how some people just seem to get ahead in this world having fallen from grace. I found out, from doing things like this. You do whatever you need to do in this world even if that means taking a short cut. I am not saying obtaining a CPN is the answer to everything but please do not say providing a CPN in lieu of a SSN WILL send you straight to jail. I can always justify and say they shouldn't be asking for a SSN cus there is a law that says we do NOT need to provide our SSN to anyone other than the IRS and employer.
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