What Is a Credit Privacy Number (CPN) and Why You Should Avoid It

With rising concerns about identity theft, data breaches, and online privacy, you might be considering using a credit privacy number. Alternatively, you may have seen credit privacy numbers promoted as a solution if you’re struggling with bad credit and are looking to apply for a credit card or business loan.

So, what exactly are credit privacy numbers (CPN)—also referred to as a credit profile number—and are they legal? In this guide, we’ll go over the reasons someone might want a CPN, the possible ramifications of using one, and other ways to bring up your credit score.

What Is a CPN (Credit Privacy Number)?

Credit privacy numbers are nine-digit numbers promoted online as an alternative to your social security number (SSN). In fact, they’re sometimes called secondary credit numbers, or SCNs. However, credit privacy numbers are a scam, according to the FTC, and are not recognized by the government. Using a CPN could lead to a fine or even a prison sentence, depending on how it was obtained and what it was used for.

However, the most important thing to know about CPNs is that they’re a scam, according to the Federal Trade Commission (FTC)¹. Most often, they’re promoted as a way for people with bad credit to pay for the opportunity to “start fresh” with a whole new credit identity. In fact, entities selling CPNs are often selling dormant social security numbers of children or are asking customers to change their address, license, and phone number—both illegal practices.

“There are no government agencies that issue a CPN, so anyone who tells you to apply for one is suspect,” George Birrell, a CPA and the founder of Taxhub, tells Fundera. “A CPN is simply a number made up by a non-governmental agency and has no legal use,” he says.

Thus, the answer to the question, “Is a CPN legal?” is no.

If you receive a CPN that is actually a stolen or dormant social security number and use it, you’ve essentially taken part in identity fraud, which is illegal. “The entire concept of a CPN is fraudulent,” says Birrell.

Using a credit privacy number can get you in trouble for a number of reasons. It is illegal to lie on a credit or loan application and to misrepresent your social security number, according to the FTC, and if you do either, you could end up facing a fine or a prison sentence.

Why Would Someone Want a Credit Privacy Number?

A quick online search will uncover many offers for free credit privacy numbers and just as many for CPNs that cost money. Companies offering credit privacy numbers appeal to potential customers with two big selling points.

However, as we established above but is worth repeating: Credit privacy numbers are a scam. With this in mind, though, here are the major myths that companies selling CPNs claim.

Myth #1: CPNs protect your social security number.

People who are worried about identity theft and dislike the idea of sharing their social security number with anyone might find a CPN appealing for the claim that it can be used as identification instead of a social security number.

In reality, however, if a lender asks for your social security number, they aren’t going to be satisfied with a credit privacy number—as it’s not legitimate or accepted by the government. Think about it: You’re asking a bank to lend you tens or hundreds of thousands of dollars, trusting that you will pay it back, but you don’t trust them enough to share your social security number?

A social security number is a way for banks and lenders to verify that you are who you say you are. A CPN, which would keep that information private, would not be accepted by lenders who need to make sure that they’re lending to the right profile.

Myth #2: CPNs can help you clean up your credit history.

CPNs are often promoted as part of a plan to improve your credit, or as a fresh start when you have bad credit. When you do an online search for “credit privacy number,” lots of credit repair programs pop up. By using a CPN, these companies claim, you can apply for credit cards, lines of credit, or loans, and the companies involved will never find out that you have bad credit.

However, it’s pretty obvious that rather than improving your credit history, the credit privacy number is intended to hide it. And common sense will tell you that as long as the CPN is connected with you—your name, address, and other identifying information—credit sources will still easily be able to uncover your credit score, no matter which ID number you use.

If anything, using a credit privacy number will make them more suspicious of your creditworthiness. Though it’s a difficult reality to face, that’s why you should focus on fixing your credit score instead. (More on that later.)

Repercussions of Using a Credit Privacy Number

So, again, what is a CPN? Say it with us: CPNs are a scam and not a credit solution. Thus, anyone offering a CPN should be considered “shady.”

In fact, a CardHub investigation of credit privacy numbers reports that criminals often use them specifically to conduct fraudulent activity.

What would happen if you put a credit privacy number on a loan application and it turned out to be a stolen social security number? Aside from the guilt you’d feel at unwittingly being a party to stealing a dead person’s or child’s identity, this can get you in a lot of legal trouble. You could end up being investigated—or even prosecuted for criminal activity. Not the least of it: You certainly won’t get your loan.

However, that’s a small matter when you consider that your business’s reputation, along with your own, could be destroyed.

Are all credit privacy numbers stolen social security numbers? Not necessarily. However, since CardHub’s investigation found that neither the Social Security Administration, the FBI, nor the Federal Trade Commission issues, controls, or tracks CPNs, the whole process is highly suspicious and not a wise course of action for any business owner.

How to Avoid CPN Scams

While credit privacy numbers may sound appealing, you don’t want to get mixed up in a legal case by participating. While there are many enticing CPN advertisements, the best option here is to not get one in the first place. Generally, if you’re looking into ways to repair or hide your bad credit:

  • Avoid anyone offering an alternative to a social security number. There really is no substitute for a social security number. As a business owner, you might be asked to use a business tax ID number (or EIN), which is a legitimate identification for businesses. However, even EINs are no replacement for social security numbers, and credit privacy numbers are no replacement for EINs.
  • Avoid any deal offering a clean slate credit identity. There is no legal such thing.
  • It’s illegal for credit repair agencies to charge you before any work has been done. So if you come across a service that’s going to charge you upfront, be wary of the legality of the company. Check out the Credit Repair Organization Act² that protects individuals in these scenarios so you know what’s legal and what’s not.

If you’re trying to clean up your credit, there is actually a lot you can be doing to get this number up, starting today.

Legitimate Ways to Improve Bad Credit

Credit privacy numbers are not a solution to bad credit. And while you might wish a silver bullet fix to struggling credit existed, there really isn’t anything out there that can skyrocket your credit overnight.

Great credit comes from dedication to good borrowing practices.

If you’re looking to improve your credit, avoid the CPNs and try incorporating the following best practices:

  • Pay your credit bills on time, every time. If you have a credit card or a line of credit, showing that you’re responsible with what you borrow every month is a great step toward building your credit. This is the one thing that will influence your credit most.
  • Keep your credit utilization low. Borrowers who take on high balances each month are more correlated with risky behavior that leads to bad credit. Try to utilize only 30% or less of the credit available to you. This means that if you have a $10,000 credit limit on a credit card, only borrow up to $3,000 at any given time. If you need to spend a lot of money on your credit cards for your business, try increasing your overall available credit to help with your utilization. You can call your current credit card provider and see if they’re willing to up your credit limit.
  • Don’t close out old accounts. Credit history is something that is factored into your score. If you have old credit accounts you no longer use, don’t close them. Let them sit and just don’t use them. Yes, the credit provider might eventually close them out, but it is better that they do it and not you.

If you have bad credit, trying to hide behind a credit privacy number is not the answer. Taking steps to repair and improve your credit isn’t fast, but it’s the only long-term solution to help you get the credit score you want and the financing you need. As is with most things in life, there is no overnight way to achieve this. It’s disciplined behavior over time that will get you there.

Finally, make sure to monitor your credit score and consider these unexpected methods to give your credit score an added boost.

The Bottom Line

When it comes down to it, trying to use a credit privacy number to hide or “repair” your bad credit quickly isn’t a viable or safe option for you or your business. Credit privacy numbers are not recognized alternatives to social security numbers and can even put you at risk for legal ramifications if you try and use one.

Overall, you’re better off working to repair your credit over time, an option that will only do you good in the long run.

Article Sources:

  1. FTC.gov. “Credit Repair Scams
  2. FTC.gov. “Credit Repair Organizations Act
Vice President and Founding Editor at Fundera

Meredith Wood

Meredith Wood is the founding editor of the Fundera Ledger and a vice president at Fundera. She launched the Fundera Ledger in 2014 and has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending. She is a monthly columnist for AllBusiness, and her advice has appeared in the SBA, SCORE, Yahoo, Amex OPEN Forum, Fox Business, American Banker, Small Business Trends, MyCorporation, Small Biz Daily, StartupNation, and more. Email: meredith@fundera.com.
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