What is a credit privacy number? Also called a CPN, this nine-digit number follows the same format as a Social Security number. However, credit privacy numbers are usually sold by irreputable businesses as part of credit repair scams. Learn more about CPNs to avoid becoming involved with this type of financial fraud.
How are CPNs created?
CPNs are nine-digit number used in place of an individual’s actual Social Security number. Often, these numbers come from young children, unsuspecting senior citizens, individuals who have developmental disabilities or people who have died. Some companies issue CPNs created by an algorithm, then cross-checked to determine whether they can successfully pass for legitimitate SSNs in a scam known as synthetic identity fraud.
Unscrupulous “credit repair” agencies may try to sell you this type of number if you have debt you can’t repay. They might also call it a credit protection number or a credit profile number.
Some fraudulent businesses charge thousands of dollars for stolen, SSNs under the guise of providing CPNs to people who cannot get out from under their debt. They may also ask you to apply for a new driver’s license with an incorrect address and get a new phone number and email address.
Are Credit Privacy Numbers Legal?
Although the idea of a new number that can erase your debt and allow you to qualify for larger loans and lower interest rates may be tempting, CPNs are illegal. Using a false Social Security number to apply for credit constitutes fraud, which means you could face serious charges if you do so with a CPN.
In addition to federal fraud charges, the court can charge you with identity theft if the CPN is actually a real person’s Social Security number. Even though a CPN may successfully get you a loan, the eventual legal consequences can be catastrophic. Often, this type of identity theft is discovered when the individual who owns the number applies for credit and finds errors and incorrect information in their report.
Your SSN is the only number you can legally use to file taxes and apply for credit, unless you have an individual taxpayer identification number (ITIN). You can use an ITIN to pay taxes if you cannot get an SSN as a resident alien, non-resident alien, or spouse or dependent of someone in one of these two groups. ITINs always start with 9.
ITINs are issued by the IRS under special circumstances for some non-resident and resident aliens, their spouses and dependents who can’t get SSNs. An ITIN is formatted like an SSN, with nine digits and dashes; the difference is that all ITINs begin with the number nine.
If you have a valid business, you may obtain an employer identification number to pay taxes for the company. The EIN does not replace a personal SSN. Instead, it is associated with your SSN as the owner of the business. It cannot be used to apply for credit, only to file business income taxes.
Do Alternatives to CPNs Exist?
You can request a new Social Security number from the Social Security Administration, but not for the purposes of erasing your debt. Some cases in which the SSA may agree to issue a new SSN include:
- You have religious documentation proving that your faith objects to a certain series of digits in the number.
- You have received threats, abuse or harassment that a new SSN would resolve.
- You experience ongoing issues as a victim of identity theft.
- Someone else has the same SSN as you.
- Someone in your family has the SSN with the next sequential digit, which causes confusion.
- You need privacy protection as a government official, famous person or witness in a criminal case.
In any of these situations, you can visit the SSA to request a new number. However, you must provide proof to support your claims, such as a police report documenting ongoing harassment. For this reason, you may want to hire an experienced attorney to guide you through this process.
If the agency agrees to give you a new number, it will retain the credit history from your old number, so it doesn’t give you a blank financial slate. The SSA will not charge you to issue a new SSN, but the process can take months and typically requires detailed questioning about your reasons for asking for a new ID number.
Do You Have to Use Your Social Security Number to Get Credit?
Although federal law doesn’t require you to give your SSN in a credit application, most lenders won’t give you a loan or credit card without it. The U.S. Privacy Act of 1974 allows you to withhold your SSN but does not recognize alternatives except for valid ITINs. While some companies claim this law is a loophole that legalizes CPNs, you can still face criminal charges if you use these numbers to apply for credit.
How Can You Avoid This Type of Scam?
Steer clear of credit repair firms and other businesses that promise to give you a new identity. Using someone else’s SSN is always illegal.
You should also look for other violations of the Credit Repair Organization Act before you move forward with a credit assistance agency. For example, these types of companies cannot charge you for services before they accomplish anything. Other red flags of a fraudulent credit repair agency include:
- Advising you against contacting the three major credit bureaus (Experian, TransUnion and Equifax)
- Failing to provide your legal rights in writing
- Requiring you to dispute true information on your credit report
- Asking you to give incorrect personal information on a loan or credit application
Financial institutions have developed new ways to detect SSN and CPN scams. Under federal law, all banks must have an electronic system that checks nine-digit SSN numbers for fraudulent use. Many companies take advantage of voice and other biometric technologies that flag suspicious identity use.
In general, protecting your own identity can protect you from scams. Never give out your SSN, email address, phone number, or other personal information when responding to an unsolicited phone call or email. Consider signing up for an identity protection service that alerts you of potential fraudulent activity on your accounts. Use strong passwords for your electronic devices and online accounts and update them frequently.
Do Legitimate Credit Repair Alternatives Exist?
Few companies offer legitimate credit repair services. While trustworthy counseling services do exist, they help you dispute incorrect information and budget better to pay your bills. They do not charge for their assistance.
Consistently making small positive actions will boost your credit over time. Try these strategies instead of resorting to a CPN if you’re struggling with debt:
- Trim all unnecessary expenses from your budget and put the money toward your bills, starting with the credit accounts that have the highest interest rates.
- Be patient. Even the most severe negative marks, such as bankruptcy and foreclosure, will no longer appear on your credit report after seven years.
- Dispute incorrect information on your credit report. Obtain a free copy from all three credit bureaus at least once a year to check for errors and possible fraud.
- Pay your bills on time and in full. This action has the most significant positive impact on your credit score. Avoid buying things you can’t pay for in cash, at least until you have resolved your outstanding debt.
- If you cannot pay your bills, contact your creditors to see if you can qualify for hardship options such as forbearance. For example, the lender may agree to reduce your interest rate or temporarily pause your payments.
- Avoid applying for new credit accounts for at least a year if possible. Too many hard inquiries in a short period of time will reduce your credit score. If you need to get a credit card or loan, look for a lender that offers preapproval with a soft credit pull to prevent damage to your score.
- Don’t “max out” your credit cards. Doing so raises your credit utilization ratio, or the amount of credit you use compared to the amount of credit you have available. For a high credit score, you should have a credit utilization of less than 30%. In other words, if you have a credit card with a $1,000 limit, keep your balance lower than $300. The lower your ratio, the better your credit will be, so pay off your cards in full each month if possible.
- Keep old credit accounts open, even if you no longer use the credit card in question. Having a long credit history has a positive influence on your score, so canceling old cards reduces your credit rating.
- Do not cosign for a loan with someone else. If he or she does not repay the account as agreed, you will be responsible for the full amount. Their late payments will also affect your credit score.
Remember that no government agency or banking institution will knowingly accept a CPN. Taking positive steps to improve your credit is the best path to a solid financial future.
