What is a Credit Privacy Number (CPN) And How To Avoid it in Credit Repair Scams
A credit privacy number (CPN) is a fraudulent alternative to a Social Security number (SSN). Predatory credit repair companies say that they can be used to sidestep having poor credit, but using them has legal consequences.
Here’s what you need to know about CPNs and how to build your credit score without worrying about breaking the law.
- Credit privacy numbers (CPNs) are a scam.
- Predatory credit repair companies advertise them as a way to escape bad credit, but using them can have serious legal consequences.
- The only way to improve your credit score is to practice good credit habits over time.
How credit privacy numbers work
A credit privacy number is a nine-digit number that’s formatted to look like a Social Security number (SSN) — for example, XXX-XX-XXXX. Also known as a “credit profile number” or “credit protection number,” fraudulent credit repair companies will sometimes market these numbers as a way to get around having bad credit.
They’ll claim that you can apply for credit using the CPN in place of your Social Security number to secure better terms, but it’s a scam.
How CPN scams work
Scammers often try to tout credit privacy numbers as a legitimate byproduct of the Privacy Act of 1974, which allows people to protect themselves from third parties trying to collect personal information, such as SSNs. But credit privacy numbers aren’t mentioned in the Act and their creation is often criminal in nature.
Sometimes identity thieves steal real SSNs, often from children or other vulnerable people. Other times, the scammers will use a computer algorithm to generate random numbers in the same format as a Social Security number. In either case, they will take those numbers and sell them as credit privacy numbers to people hoping for a quick fix for their poor credit histories.
Unfortunately, if you try to use a CPN to apply for a loan or another form of credit, it can have serious legal consequences. You can be charged with identity fraud for falsifying information on a loan application, as well as identity theft if you’re caught using a stolen Social Security number.
There are a lot of predatory credit repair scams out there, so it’s important to verify that you’re working with a legitimate organization to repair your credit. Credit repair companies must abide by the Credit Repair Organizations Act (CROA).
Here are some red flags that you’re working with a scammer instead.
- Advocating for using a CPN instead of your SSN
- Requiring payment before completing what was promised
- Guaranteeing results
- Asking or suggesting that you mislead companies about your credit history
- Asking you not to contact the credit reporting agencies
- Failing to explain your rights under CROA
What’s the difference between an SSN, an ITIN and a CPN?
The IRS uses taxpayer identification numbers to administer its tax laws. SSNs and individual taxpayer identification numbers (ITINs) are two types of taxpayer identification numbers, with ITINs being used for certain populations who are unable to obtain a Social Security number. In both cases, these numbers are issued by official government entities.
In contrast, CPNs are not issued by a government body. They are often stolen or created by scammers who are looking to steal money from people who are hoping to find a quick fix for their poor credit.
How to rebuild your credit score the right way
While a credit privacy number may not be the answer, the good news is that it’s possible to repair your credit yourself. Fixing bad credit can take time, but you can improve your credit score by following these steps:
Pay your bills on time
Making regular payments on credit cards, loans or a mortgage is the most important thing you can do to build good credit. Payment history accounts for 30% of your credit score.
If you’ve missed payments in the past, your score will likely have taken a hit, but if you start making all of your payments on time, your credit score will eventually recover.
Don’t use too much credit
Taking out too many credit accounts within a short time or using a high percentage of your available credit will drag down your score. Instead, open accounts sparingly to avoid the impact of multiple hard credit checks, and try to keep your credit utilization ratio (the amount of credit you’re using versus your total credit limit) under 30%.
Dispute credit report errors
You should occasionally review your credit report to see if there is any inaccurate information that could hurt your score. If there are, disputing those records with credit bureaus may be the best way to improve your credit score quickly — as long as the errors get fixed.
Wait for negative events to fall off
It may feel impossible to escape the impact of late payments and other financial mistakes, but they don’t stick around forever. Most negative credit events disappear from your report after seven years, though some bankruptcies stay on your report for 10 years.
It’s important to monitor your credit score, even if you aren’t planning on taking out any new loans soon.
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