Beware of Quick Fix Credit Repair Scams

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By: Financial Hotline
Fall 2020 (Vol. 38, No. 3)

You’ve probably seen ads from companies promising a “new credit identity” or a fresh start for your credit history. It may seem like just the thing you need to get your credit back on track, but it’s actually a scam. These companies often sell Social Security numbers illegally.

If your credit is less than golden, there are steps you can take to repair it on your own, at no cost. Only time and a personal debt repayment plan will improve your credit.

Companies promising a “new credit identity” say they can help you hide bad credit history or bankruptcy for a fee. If you pay them, these companies will provide you with a nine-digit number that looks like a Social Security number. They may call it a CPN — a credit profile number or a credit privacy number. Or, they may direct you to apply for an EIN — an Employer Identification Number — from the Internal Revenue Service (IRS). EIN’s are legitimate numbers, typically used by businesses to report financial information to the IRS and Social Security Administration – but an EIN is not a substitute for your Social Security number.

The credit repair companies may tell you to apply for credit using the CPN or EIN, rather than your own Social Security number. And they may lie and tell you that this process is legal. But it’s a scam. These companies may be selling stolen Social Security numbers, often those taken from children. By using a stolen number as your own, the con artists will have involved you in identity theft.

If you follow a credit repair company’s advice and commit fraud, you might find yourself in legal trouble. It’s a federal crime to lie on a credit or loan application, misrepresent your Social Security number or obtain an EIN from the IRS under false pretenses.