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Your credit reports are directly tied to your Social Security number (SSN). When applying for new credit (i.e., a credit card), your credit profile is checked using your SSN.
A CPN scam is a type of synthetic identity fraud where you use a SSN that has not been assigned to you by the Social Security Administration (SSA).
Often sold to repair poor credit, CPN numbers are not only ineffective for credit reporting purposes, but using one is illegal.
What Is a CPN Number?
A credit privacy number (CPN), also referred to as a credit profile number or credit protection number, is a nine digit number in a Social Security number format. A CPN is designed to be used in place of a Social Security number to protect an individual’s Social Security number. I.E., to prevent your SSN from being stolen.
The use of a CPN falls under a gray area. While a CPN itself is not illegal, using one often is.
The U.S. Privacy Act allows you to withhold your Social Security number when it is not legally required. But, many products and services request your SSN. So using a CPN is meant to satisfy the vendor’s requirements without violating your rights.
Unfortunately, any nine digit number in the SSN format could potentially be someone else’s actual Social Security number. This means using credit privacy numbers as a credit repair solution could land you in jail.
Do CPN Numbers Work?
Credit privacy numbers as a form of credit repair never work. You have to fill out more than just your Social Security number on credit applications. The initial purpose of asking for your SSN is to verify your identity.
When the creditor/lender checks with the credit bureau, they will find that the CPN you used does not match the rest of the information on your application (i.e., name, address, etc.).
This will result in a rejected application and could get you flagged for identity fraud.
Some of the companies trying to sell you CPNs actually recommend using a different set of personal information, including creating a new email, address, or even a driver’s license to go along with your CPN. This is a criminal act.
Even if a creditor were to accept your CPN and approve your application, you wouldn’t be building credit for yourself. You’ll be building it for someone else.
As far as trying to protect your identity or SSN, using a CPN is often not effective either. A better solution for withholding your SSN is simply leaving the request field blank.
How Are CPNs Created?
There are no rules or regulations governing the creation of a CPN. A CPN can be any series of numbers formatted to read like a Social Security number. For instance, 123-45-6789.
The credit privacy numbers sold by shady credit repair agencies are slightly different. Instead of just being made-up numbers, these CPNs are often dormant Social Security numbers or employer identification numbers (EIN).
A dormant Social Security number is the one that the Social Security Administration has assigned but is not currently active.
This most often consists of the Social Security numbers of children. However, it can also include the SSNs of incarcerated individuals or those who are deceased.
These dormant CPNs are not created; they are simply Social Security numbers stolen from the individuals they were assigned to. And using a CPN like this, even if it’s in an innocent attempt to improve your credit profile, consists of fraud.
This criminal activity could result in hefty fines and even land you in prison.
It is worth noting that there are limited circumstances where you can actually petition to be assigned a new Social Security number.
If, for instance, your credit has been ruined by identity theft, with the appropriate supporting documentation, you can request a new SSN from the Social Security Administration office.
How to Improve Your Credit Without a CPN
Using a CPN to improve your credit or obtain new credit is not the way to go. Not only will using one do nothing to improve or repair your current credit score, but you could also be violating several federal laws.
But what alternatives are out there when your credit history is destroyed, and it seems like no one will take a chance on you?
Get a Credit Builder Loan
A credit builder loan is a secured loan designed to help those with bad credit improve their credit history.
Instead of going through an extensive credit qualification process, you’ll need to provide security for the loan. This usually consists of money held in a savings account or CD (certificate of deposit).
Applying for these loans often doesn’t require a credit check. However, you will need to provide some income information to prove you can make monthly loan payments.
Check with your local bank or credit union when looking for a credit builder loan.
Or, if you want an option that doesn’t require any kind of upfront security deposit, check out the loans offered by CreditStrong or Self.
Report Your Rent to the Credit Bureaus
Did you know that paying your rent can actually build credit history?
Well, it can. Up to two years’ rent payments can be added to your credit reports. This can help boost the payment history and length of credit history portions of your credit score.
All of the credit bureaus support the reporting of rent payments. However, most landlords choose not to report payments because of the time and expense involved. Still, it is worth checking with your landlord to see if this is a service they offer.
But plenty of third-party companies will report your rent payments for a small fee. Some of these services require the cooperation of your landlord, while others can just look at your checking account to view the recurring payments.
BoomPay, for instance, works independently of landlords and only charges $2 a month for reporting rent payments.
Get a Debit Card That Builds Credit
Generally speaking, the debit card your local financial institution issues will not help you build credit. But Extra offers a debit card that can improve your credit score.
Extra does not require a credit check and earns rewards just like a normal credit card would. To qualify, you’ll need to link your bank account to the card.
The Extra debit card just charges you a flat monthly subscription fee of $7.
Are CPN Numbers Legal?
Using a CPN to build credit is illegal. CPNs are not recognized as legitimate by any credit bureau, creditor, or government agency.
In most cases, using a credit privacy number instead of an SSN will be considered fraud. For instance, if you tried to use a CPN when filing your taxes, this would be tax fraud.
And depending on the CPN you are using, you could end up in even more trouble. Using a CPN that is stolen could result in severe consequences. Even if you didn’t know the credit repair company you purchased it from stole it, you are liable.
Can You Go to Jail for Using a CPN?
Yes, using a CPN can land you in jail.
In most cases, a CPN is just a stolen Social Security number. And using one consists of identity theft, which is a federal crime.
Identity theft currently carries a jail sentence of up to 15 years!
If your use of a CPN results in a felony, such as using a CPN to obtain a firearm or for immigration purposes, there is a mandatory two year minimum jail sentence.
And this is only for the identity theft charge. You could face additional jailable offenses for defrauding a bank, mail/wire fraud, etc.
In addition to jail time, you’ll likely face fines or restitution.
Unfortunately, using the defense of credit repair will not get you out of trouble.
How Much Does a CPN Number Cost?
If you purchase a CPN package online, the cost can range from a few dollars to over $3,000!
And if you are caught and convicted of fraud, you could face thousands more in fines and restitution.
For less than $500, you could open a credit builder loan, credit building debit card, and obtain rent reporting for two full years. Adding all of these accounts to your credit reports will improve your credit history in no time.
Total Cost of BoomPay = $73. $25 fee for past payment history plus $2/month for two years.
Total Cost of Extra = $168. $7/month for 24 months.
Total Cost of CreditStrong = $167. $1,152 paid for Build & Save $1000 with a return of $985.
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Amanda Garland is a personal finance blogger living in Dallas, TX. 10 years ago she was living paycheck to paycheck and knew nothing about how credit works. She learned some hard lessons in her fight for financial stability. Now she has a friendly competition going with her husband to see who can reach a credit score of 850 first. She is also a poet, having obtained a Bachelor of Fine Arts degree in Creative Writing.