Ever Heard of a Credit Privacy Number? It Can Ruin Your Loan Application

Rieva Lesonsky

Rieva Lesonsky

Contributor at Fundera
Rieva Lesonsky is a small business contributor for Fundera and CEO of GrowBiz Media, a media company. She has spent 30+ years covering, consulting and speaking to small businesses owners and entrepreneurs.
Rieva Lesonsky

Ever heard of a credit privacy number? If not, read on: they could make a big difference to your business loan application.

Credit privacy numbers or credit profile numbers (or CPNs) 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.) With rising concerns about identity theft, data breaches, and online privacy, you might be considering using a credit privacy number. 

But before you do, however, here are some things you should know.

Why Use 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 use two big selling points or reasons to get one. However, both can be highly problematic when it comes to getting a business loan.

1. It protects your Social Security number.

People who are worried about identity theft and dislike the idea of sharing their Social Security number with anyone might get a CPN thinking they can use it as identification instead of their SSN.

In reality, however, if a lender asks for your SSN, they aren’t going to be satisfied with your credit privacy number. 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 SSN?

2. It can help you clean up your credit history.

CPNs are often promoted as part of a plan to improve your credit. When you do an online search for “credit privacy number,” lots of credit repair programs pop up. By using the 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 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—it’s a simple matter for credit sources 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. That’s why you should focus on fixing your score instead.

Be Wary of Shady Sources

As you might expect from a product that’s pitched as a way to cover up bad credit, CPNs are pretty iffy. A CardHub investigation of CPNs reports that criminals often use them specifically to conduct fraudulent activity. Even worse, many credit privacy numbers are actually stolen or inactive Social Security numbers, such as those “from children or deceased individuals” an FBI spokesperson told CardHub.

What would happen if you put your CPN on a business loan application and it turned out to be a stolen SSN? Aside from the guilt you’d feel at unwittingly being party to stealing a dead person or child’s identity, this can get you in a whole lot of hot water. You could end up being investigated—or even prosecuted for criminal activity. Not the least of it: You certainly won’t get your business 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 SSNs? 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—and none would give a definitive answer as to whether the numbers are actually legal or not—the whole process sounds highly suspicious.

Make Smart Moves

If you really have issues about sharing your SSN with people, there are other ways to protect it. Never input your SSN online or share it electronically, don’t carry your Social Security card with you, and never give it out over the phone. (Get more tips at the Social Security Administration website.) Also, consider paying for identity theft protection services.

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 business financing you need.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
Rieva Lesonsky

Rieva Lesonsky

Contributor at Fundera
Rieva Lesonsky is a small business contributor for Fundera and CEO of GrowBiz Media, a media company. She has spent 30+ years covering, consulting and speaking to small businesses owners and entrepreneurs.
Rieva Lesonsky

1 Comment

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  • Ben Rashkovich

    Thursday, September 22nd, 2016

    I'd never heard of CPNs before this article... Good to know. Sounds like a scam people should be aware of.

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