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If you're struggling with poor credit scores, you know they can pose plenty of challenges. A poor credit score can keep you from getting approved for a credit card or a car loan. It can make renting an apartment difficult. So when you see an ad promising to help you start over with a new credit history by getting a CPN, it may seem like the answer to your prayers. But is it?
A CPN, or credit privacy number, is a nine-digit number that's formatted just like a Social Security number (SSN). It may also be called a credit profile number or credit protection number. Companies that sell CPNs to consumers market them as a way to hide a bad credit history or bankruptcy. They'll also claim you can use the CPN instead of your SSN to apply for credit with your new credit identity.
Does this seem too good to be true? That's because it is. In fact, it's illegal. Keep reading to discover the truth about CPNs.
Do CPNs Really Help With Bad Credit?
Companies selling CPNs market them as replacement SSNs, promoting the idea that CPNs are legitimate. For example, one site advertising CPNs claims the numbers are "fully tri-merged with the Social Security Administration." (Sounds official, doesn't it?)
In reality, these companies are scam artists. They may obtain SSNs by dubious means—often from children, senior citizens or prison inmates.
If you're paying attention, you'll spot plenty of warning signs that CPN sellers are involved in something shady. While SSNs are issued for free, companies will charge you money for a CPN—sometimes thousands of dollars. They may tell you to provide false information—such as a different address, phone number or email address—when you fill out credit applications using the CPN. Often, they'll pretend this is a way to protect your identity—but they're really directing you to create a false identity.
When you're eager to repair your credit, it's easy to ignore these red flags. But using a CPN can lead to much bigger problems than a poor credit rating. No matter how the CPN is obtained, using it on a credit application or anywhere else may be considered identity theft. In addition, lying on a credit or loan application or misrepresenting your SSN is a federal crime.
How Are CPNs Different From ITINs and Social Security Numbers?
The Internal Revenue Service (IRS) uses taxpayer identification numbers in administering tax laws. SSNs and Individual Taxpayer Identification Numbers (ITINs) are two types of taxpayer ID numbers. SSNs are issued by the Social Security Administration; they're what most people use when filing taxes.
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.
CPNs are nine-digit numbers that resemble SSNs and ITINs.
What About Getting a New SSN?
When poor credit is costing you money or opportunities, it's natural to wish you could start all over again. However, getting a new SSN isn't the answer. The IRS can issue a new SSN only if:
- Sequential SSNs assigned to members of the same family are causing problems.
- More than one person is assigned or is using the same SSN.
- A victim of identity theft is having ongoing issues as a result of using their original SSN.
- Someone is being harassed, abused or their life is in danger.
- You have religious or cultural objections to numbers or digits in your original SSN.
Even in these extreme situations, getting a new SSN isn't easy. You'll have to prove there's a good reason for the change by providing all the documentation the Social Security Administration asks for and getting others (like the police or your church or temple) to support your request.
More to the point, getting a new SSN doesn't mean you can leave the old one behind. To make sure you get credit for all your earnings and receive the right amount of Social Security payments when you retire, the Social Security Administration will cross-reference your new SSN with your original SSN. No matter what you do, you and your original SSN are permanently linked.
How to Rebuild Your Credit the Right Way
You can't instantly wipe away bad credit by purchasing a CPN. A better approach: Take the money you would have spent on a CPN scam and put it toward rebuilding your credit history the right way. Here's how:
- Pay your bills on time. On-time payments are the single biggest factor in your credit score. Even if you can only make minimum payments, paying on time will help. To avoid missing due dates, set reminders for yourself or set up autopay on your accounts. If all your bills are due around the same time and it's hard to cover them all at once, contact the creditor and ask if you can change your due date. Are you good about paying utility bills, cable bills or cellphone bills on time? Consider signing up for Experian Boost™† , which lets you add these accounts to your credit file so you can benefit from your positive track record.
- Reduce your credit utilization ratio. This ratio shows how much of your available credit you're using and is second only to payment history in credit score calculations. To keep your credit scores in good shape, you should use no more than 30% of your available credit, but for the best scores, think single digits. Learn more about how your credit utilization ratio is calculated and how to improve it.
- Delay applying for credit. When you apply for a loan, credit card or another type of revolving credit, the lender will ask one or more of the credit bureaus for your credit file, which causes a hard inquiry on your credit report. Hard inquiries cause a dip in your credit score. Although the dip usually lasts only a few months, applying for several credit cards or loans at the same time may suggest to credit scoring models such as FICO that you're in financial trouble, which can hurt your credit score.
- Keep old credit accounts open. If credit cards burn a hole in your pocket, closing the account after you pay one off may seem like a smart way to remove temptation. But doing so also reduces your total available credit, typically increasing your credit utilization ratio. Keeping older accounts open also shows that you've had credit for a long time, which helps your credit score. Even if you don't plan to use them, consider keeping older credit accounts open.
- Try using Experian Boost. Experian Boost helps you get credit for your on-time utility and telecom payments by adding positive payment information to your credit report. In many cases, this results in a boost to your FICO® Score* .
How to Get Started
You can begin rebuilding your credit by getting a free credit report from Experian. It tells you which factors are hurting your scores the most, so you can start improving those areas first. By following the steps above and being patient, you'll gradually improve your credit score. Yes, it takes time and effort, but the positive results will be worth it.