Watch out for this scam about a new credit file...
New Credit File by Christian's Credit Blog
Wednesday, April 21, 2010
Sources:
Examples of what I believe to be craigslist scams:
GET A NEW INDENTITY !! START A FRESH CLEAN PROFILE TODAY !!! (NY )
Fresh Start With New Credit File Any State (Fung available Novelty I.D.)
new credit profile 2nd chance in life program get that money !! (ny )
WATCH OUT FOR THE WEBSITE BELOW!
The Nation's #1 Provider of CPN's (Credit Profile Numbers). A New 9 Digit Number!
New Credit File by Christian's Credit Blog
Wednesday, April 21, 2010
The most common lure to quick financial freedom - a new credit file. You may have seen this advertised online. This is very grey area. If you ask 10 people if it's legal, you will probably get 11 different answers. There are a few variations to this method but they all essentially attempt to accomplish the same thing and that is to create a new separate credit file within the credit bureaus so you can start from scratch with a clean slate. Unfortunately, this is not something I recommend. In the time that I have spent in the credit business this method has proven to be more of a headache than anything else. How is a new credit file created? The credit bureaus are just giant databases where all consumer information is stored. When you apply for credit of any kind, the lender is going to check your credit report. Your credit report is all the information you have ever provided since the very first time you applied for credit. It lists all your accounts, balances, dates the accounts were opened, payment history, inquries etc...
The credit bureaus use certain information to identify you. Your name, social security number, date of birth, address, phone and previous addresses make up your file. Now let's say you're 18 years old and you have never applied for credit in your life. If this were the case, then the credit bureaus would have no information on you at all. So the very first time you apply for something, a file would be created for you automatically within the credit bureaus. Since you don't have any accounts yet, your credit file would now be "blank". You see, the credit bureaus only have your vital info because YOU GAVE it to them throughout your life. The most common way to create a new file is to use another number rather than your social security number. It sounds great and it does work. The problem is that it is also a felony. Here is why. The very act of writing another number on a credit application where it asks for your social security number is a crime. This is a fact. This is not my opinion. Don't get me wrong, I strongly feel that the credit system is broken, unforgiving and flawed but what I think doesn't matter. If the Federal Government says you can't do it, chances are they will win so it's really not worth it. The vendors online who actually sell this service of creating a new credit file for you are taking a terrible risk and most of them don't really care. They just want to make as much money as they can until they have to disconnect their phones and take down their website. It still amazes me how blatant the advertising is for a service that screams fraud but it is going on.
So what number is being used in place of your SSN?
There are several numbers. The first is the CPN.
CPN (Credit Privacy Number)
This is a number that is somehow "created" to match your date of birth and state of birth. The vendors of these numbers claim that they have a way to insure that the number is not in use by anyone else and that it is not the SSN of a deseased person. The promoters of this method insist that you don't need to give your SSN to any non-government agency (like a bank or a credit bureau). Although this may be true, it does not change the fact that what is taking place is misrepresentation. You are really deceiving the lender by hiding unfavorable credit information from them so that they will extend you credit that they would not extend if they knew about your credit history. According to the law, this is considered "file segregation" which is a crime. It also violates the "Truth in Lending" law. In my opinion, it is best to stay away from this method. It can only lead to problems. Although technically it is possible to get a good number and keep everything separate, the chances of the number being a stolen SSN, the SSN of a deseased person or someone in prison or even a child are very high. You have to understand that the people selling these "numbers" really don't care about you. They just want fast money so ask yourself this - Do you really think they took the time to make sure the number is good? Do you think they are even smart enough to know how to do that even if they wanted to? The answer is no. If you ever get on the phone with one of these people you will quickly see that they themselves don't even fully understand how it works. That is how you know it's a bad idea. If you're ever speaking to one of these people, see what they say when you ask about your driver's license number. See what they say when you ask them what to do if a lender wants to see your SS card. There is even one sleazy vendor on Staten Island that offers to give you a phony novelty SS card with a CPN on it!!! Can you believe it? This guy is just begging to go to prison. It will become clear after speaking with one of these undereducated people that they have no regard for the law or they are too ignorant to do anything else to earn a living. Either way, this is a bad idea and I will not even add my trade lines for people wanting to use CPNs. I just won't do it. That is why I've been in business for so long and I still get calls from people who I've serviced years ago who want to work with me again. That is a RARE thing in this business.
What can go wrong with a CPN?
The answer is - many things. First, it is very likely that your files will merge in the credit bureaus. It's just too much work. You need a new address that you've never lived at, you need a new phone number that is listed with 411 which means you have to get a land line in your name at the new address. So now you have a phone bill to pay not to mention the cost of the new address. You then have to make sure that you never apply for credit with lenders that you already had credit with using your other file. It's just a nightmare. Plus, that's if things go well! If the number is bad, accounts will close, you will get calls from the bank asking about the number, and god forbid you borrow LARGE amounts of money and don't pay it back and the bank sees it's not your real SSN. You can see where this is going.
SCN (Secondary Credit Number)
This is strictly a marketing term. Its purpose is to make you think that it's not a CPN so you will think it's legal and different but it's not. It is just another 9-digit number that is not your real SSN. That is all it is. These came out after the CPNs did after people started to get nervous about them and wanted something new. So the scammers knew this and came up with SCN to give people a new thing to look at. Again, I would stay away from these as well for the same reasons stated above.
Legal Name Change (Alias)
This is very popular right now because technically you are still using your actual SSN. Here, you are actually changing your name via court order. Now you have a new name which means you can get a new driver's license and a new SS card from the SSA with your new name on it. Whether or not this is ethical is really up to you. I personally don't like the idea of changing my name. That's just my opinion. This is really just another form of file segregation because it will create a new and separate credit file within the credit bureaus. The difference is that now it's going to be harder to prove that you intentionally meant to misrepresent yourself and defraud a lender. The only issue here is that since you are using your SSN, it may cause the file to merge with your old one and list BOTH of your names on your credit file which is a huge red flag. You still need a new address and phone.
EIN/TIN (Employer Identification Number / Taxpayer Identification Number)
This is probably the oldest and first form of file segregation. It's also the dumbest and worst idea. Not only is it just as bad as a CPN, but now you're obtaining an EIN from the IRS under false pretenses which is a crime PLUS most EINs are re-used SSNs so they will come up as being issued much later than when your SSN was issued. This will cause a red flag because your SSN was typically issued a few years after you were born. Terrible idea. There are still people out there selling this!!!! I'm not kidding. If you want to know what the Federal Trade Commission thinks about this method, click on the link below:
2nd Social Security Number
Yet another way to create a new credit file is to obtain a 2nd Social Security Number. This is probably the best and most legitimate way to create a new file but it's also the most difficult. The Social Security Administration will, in some cases, issue you a 2nd SSN. You have to request it and your request has to be submitted in the correct format. You also must provide a very good reason and you must be able to back it up with evidence. Some of the reasons that the SSA will consider are identity theft, domestic violence, witness protection, religious reasons and extreme financial hardship. You typically have to submit court ordered name changes, police reports and proof of fraud/id theft with your request and even then you may have to actually go to your local SSA office and sit with an agent to discuss the matter. If you are approved, you will get a brand new SS card with your new number on it in about 2 weeks. A good friend of mine got a new number simply because he had three consecutive sixes (666) in his number!! So this is another way to create a new file and since you are actually using your real SSN, you can have a second chance at credit without misrepresenting yourself on a credit application. You also MUST give this new SSN to your employer, the IRS and the DMV.
The most important issue with a new credit file is the intention of the borrower. All of methods work as long as any loans or lines of credit that you obtain are repaid. The true criminal act of using a new credit file is applying for credit with the INTENTION of never paying it back so if you do take this road, you better be sure you can make your payments.
The credit bureaus use certain information to identify you. Your name, social security number, date of birth, address, phone and previous addresses make up your file. Now let's say you're 18 years old and you have never applied for credit in your life. If this were the case, then the credit bureaus would have no information on you at all. So the very first time you apply for something, a file would be created for you automatically within the credit bureaus. Since you don't have any accounts yet, your credit file would now be "blank". You see, the credit bureaus only have your vital info because YOU GAVE it to them throughout your life. The most common way to create a new file is to use another number rather than your social security number. It sounds great and it does work. The problem is that it is also a felony. Here is why. The very act of writing another number on a credit application where it asks for your social security number is a crime. This is a fact. This is not my opinion. Don't get me wrong, I strongly feel that the credit system is broken, unforgiving and flawed but what I think doesn't matter. If the Federal Government says you can't do it, chances are they will win so it's really not worth it. The vendors online who actually sell this service of creating a new credit file for you are taking a terrible risk and most of them don't really care. They just want to make as much money as they can until they have to disconnect their phones and take down their website. It still amazes me how blatant the advertising is for a service that screams fraud but it is going on.
So what number is being used in place of your SSN?
There are several numbers. The first is the CPN.
CPN (Credit Privacy Number)
This is a number that is somehow "created" to match your date of birth and state of birth. The vendors of these numbers claim that they have a way to insure that the number is not in use by anyone else and that it is not the SSN of a deseased person. The promoters of this method insist that you don't need to give your SSN to any non-government agency (like a bank or a credit bureau). Although this may be true, it does not change the fact that what is taking place is misrepresentation. You are really deceiving the lender by hiding unfavorable credit information from them so that they will extend you credit that they would not extend if they knew about your credit history. According to the law, this is considered "file segregation" which is a crime. It also violates the "Truth in Lending" law. In my opinion, it is best to stay away from this method. It can only lead to problems. Although technically it is possible to get a good number and keep everything separate, the chances of the number being a stolen SSN, the SSN of a deseased person or someone in prison or even a child are very high. You have to understand that the people selling these "numbers" really don't care about you. They just want fast money so ask yourself this - Do you really think they took the time to make sure the number is good? Do you think they are even smart enough to know how to do that even if they wanted to? The answer is no. If you ever get on the phone with one of these people you will quickly see that they themselves don't even fully understand how it works. That is how you know it's a bad idea. If you're ever speaking to one of these people, see what they say when you ask about your driver's license number. See what they say when you ask them what to do if a lender wants to see your SS card. There is even one sleazy vendor on Staten Island that offers to give you a phony novelty SS card with a CPN on it!!! Can you believe it? This guy is just begging to go to prison. It will become clear after speaking with one of these undereducated people that they have no regard for the law or they are too ignorant to do anything else to earn a living. Either way, this is a bad idea and I will not even add my trade lines for people wanting to use CPNs. I just won't do it. That is why I've been in business for so long and I still get calls from people who I've serviced years ago who want to work with me again. That is a RARE thing in this business.
What can go wrong with a CPN?
The answer is - many things. First, it is very likely that your files will merge in the credit bureaus. It's just too much work. You need a new address that you've never lived at, you need a new phone number that is listed with 411 which means you have to get a land line in your name at the new address. So now you have a phone bill to pay not to mention the cost of the new address. You then have to make sure that you never apply for credit with lenders that you already had credit with using your other file. It's just a nightmare. Plus, that's if things go well! If the number is bad, accounts will close, you will get calls from the bank asking about the number, and god forbid you borrow LARGE amounts of money and don't pay it back and the bank sees it's not your real SSN. You can see where this is going.
SCN (Secondary Credit Number)
This is strictly a marketing term. Its purpose is to make you think that it's not a CPN so you will think it's legal and different but it's not. It is just another 9-digit number that is not your real SSN. That is all it is. These came out after the CPNs did after people started to get nervous about them and wanted something new. So the scammers knew this and came up with SCN to give people a new thing to look at. Again, I would stay away from these as well for the same reasons stated above.
Legal Name Change (Alias)
This is very popular right now because technically you are still using your actual SSN. Here, you are actually changing your name via court order. Now you have a new name which means you can get a new driver's license and a new SS card from the SSA with your new name on it. Whether or not this is ethical is really up to you. I personally don't like the idea of changing my name. That's just my opinion. This is really just another form of file segregation because it will create a new and separate credit file within the credit bureaus. The difference is that now it's going to be harder to prove that you intentionally meant to misrepresent yourself and defraud a lender. The only issue here is that since you are using your SSN, it may cause the file to merge with your old one and list BOTH of your names on your credit file which is a huge red flag. You still need a new address and phone.
EIN/TIN (Employer Identification Number / Taxpayer Identification Number)
This is probably the oldest and first form of file segregation. It's also the dumbest and worst idea. Not only is it just as bad as a CPN, but now you're obtaining an EIN from the IRS under false pretenses which is a crime PLUS most EINs are re-used SSNs so they will come up as being issued much later than when your SSN was issued. This will cause a red flag because your SSN was typically issued a few years after you were born. Terrible idea. There are still people out there selling this!!!! I'm not kidding. If you want to know what the Federal Trade Commission thinks about this method, click on the link below:
2nd Social Security Number
Yet another way to create a new credit file is to obtain a 2nd Social Security Number. This is probably the best and most legitimate way to create a new file but it's also the most difficult. The Social Security Administration will, in some cases, issue you a 2nd SSN. You have to request it and your request has to be submitted in the correct format. You also must provide a very good reason and you must be able to back it up with evidence. Some of the reasons that the SSA will consider are identity theft, domestic violence, witness protection, religious reasons and extreme financial hardship. You typically have to submit court ordered name changes, police reports and proof of fraud/id theft with your request and even then you may have to actually go to your local SSA office and sit with an agent to discuss the matter. If you are approved, you will get a brand new SS card with your new number on it in about 2 weeks. A good friend of mine got a new number simply because he had three consecutive sixes (666) in his number!! So this is another way to create a new file and since you are actually using your real SSN, you can have a second chance at credit without misrepresenting yourself on a credit application. You also MUST give this new SSN to your employer, the IRS and the DMV.
The most important issue with a new credit file is the intention of the borrower. All of methods work as long as any loans or lines of credit that you obtain are repaid. The true criminal act of using a new credit file is applying for credit with the INTENTION of never paying it back so if you do take this road, you better be sure you can make your payments.
Examples of what I believe to be craigslist scams:
GET A NEW INDENTITY !! START A FRESH CLEAN PROFILE TODAY !!! (NY )
Fresh Start With New Credit File Any State (Fung available Novelty I.D.)
new credit profile 2nd chance in life program get that money !! (ny )
WATCH OUT FOR THE WEBSITE BELOW!
The Nation's #1 Provider of CPN's (Credit Profile Numbers). A New 9 Digit Number!
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