If you’ve ever thought about trying to improve your credit, you’ve probably heard about the credit privacy number, or CPN. Those who sell them will tell you that CPN use is all the rage. Everyone, from politicians to celebrities, is doing it. Other financial “experts” will tell you that a CPN will give you an easy, fresh start by letting you walk away from past credit woes.
Lies. All sweet, little huge, dangerous lies.
What is a Credit Privacy Number (CPN)?
A Credit Privacy Number, sometimes called a Credit Profile Number or Credit Protection Number, is a nine-digit financial tracking number that can (supposedly) be used by lenders to review your borrowing and application history.
No government agency issues these numbers, oversees their creation, or encourages consumer use. The legality of using a CPN is murky, at best. At worst, by using one, you could end up committing multiple felonies without even knowing it.
Credit repair companies and “experts” convince consumers that CPNs are used by high profile individuals to secure their privacy, and can be leveraged by the everyday person to get a fresh start on their credit profile.
Unscrupulous individuals will sell them to customers with promises of a financial clean slate, without giving them the truth about what they’re really buying.
What is a CPN, Really?
In most cases, the credit privacy number you purchase will be one of two things:
- A stolen Social Security Number, often belonging to a child, senior citizen, recently deceased person, or someone incarcerated (most common)
- A made up string of digits that some fly-by-night company used to scam you out of your hard-earned money
That means, when you use the CPN you’ve purchased to “build your new credit profile,” you are probably committing fraud. Use of another person’s Social Security Number on an application for credit is identity theft, and depending on the purpose for which it was used, various types of bank fraud. Unfortunately, thousands of unsuspecting consumers are being enticed into criminal acts without realizing what they’re doing is illegal.
But Ilena…What About the Credit Privacy Act of 1994?
There is no such thing. If a “credit repair company” attempts to cite this mythical law as why CPNs are perfectly legal to use, you should know you’re being sold a bill of goods.
There was a Privacy Act of 1974, which dealt with the SEC records system, and a Privacy Act of 1994 from the Office of Personnel Management (OPM), relating to computer matching for OPM retirement benefits, but neither of those had anything to do with consumer credit.
As with anything, if something sounds too good to be true, it probably is.
How to Avoid Being Caught Up in a CPN Scheme
Before you consider using any company to assist you with credit repair, do your research on their proposed methods.
Be wary of any company promising to bump your credit score up to the 700-800 range in an extremely short period of time. (“Got a 529? We’ll get you to a 720 in 90 days. Guaranteed!”)
Refer to the Credit Repair Organizations Act (Title IV of the Consumer Protections Act) for information on how credit repair companies must present their services to consumers in order to be considered in compliance. If you run into a company that isn’t following these guidelines, file a complaint with the FTC.
If you’re struggling with bad credit, develop a plan to improve it over 12-24 months using proven methods. Having a low credit score is costly, and will limit your lending options for a period of time, but it isn’t the end of the world. With dedication and financial education, it can be fixed – without risking your finances and your freedom.
Have you ever been approached by a credit repair company about using a CPN? What smart credit tips would you share with other readers? Let us know in the comments.