What Is a Credit Privacy Number — and Is It Legal?

Your credit history is tied to your Social Security number, which means a rough stretch follows you around. So the pitch is tempting: For a few hundred dollars, someone sells you a nine-digit "credit privacy number" to use instead, and your negative history disappears.

It doesn't work that way, unfortunately, and using such a number can be a federal crime. Here's what a CPN actually is, where the numbers come from, and what to do instead.

Is a credit privacy number legal?

Also marketed as a credit protection number or credit profile number, a credit privacy number (CPN) is a nine-digit number some credit repair companies offer to hide your poor credit history. Rather than use your Social Security number, you're told to use this CPN when applying for a credit card or a loan.

A CPN might sound like a cheat code to escape the pitfalls of poor credit. But like most "easy" fixes, it’s not a legitimate way out. The government does not issue CPNs, and if you use one on any kind of application, it's financial fraud. If you’re caught you face felony charges, significant fines, and even prison time.

And the negative consequences of using a CPN don’t only affect you: Often, CPNs offered by credit repair scams are stolen Social Security numbers.

How CPN scams work

Although there are some legitimate companies that can help you improve your credit, the credit repair companies that sell CPNs are often scammers looking to take advantage of financially vulnerable people and those with poor or limited credit histories.

These companies advertise CPNs as legitimate tools for getting a "clean financial slate" or fixing your credit. In reality, companies that sell CPNs weave an elaborate web of fraud to generate a profit involving several sketchy steps that include:

• Stealing or generating numbers. CPN scams often deliberately target the Social Security numbers of children, the elderly, and incarcerated people for identity theft, selling them to consumers trying to hide poor credit histories.
• Selling CPNs to customers. Scammers then sell these stolen Social Security numbers, promoting them as a safe, legal way to protect privacy, fix credit, or both.
• Involving buyers in the scam. Some scammers encourage CPN buyers to fabricate credit histories, including adding themselves to real credit cards as authorized users.

Sometimes, CPN scammers pressure their customers to become even more complicit in identity theft. For example, they might tell CPN buyers to use different addresses or phone numbers on credit applications, exposing unsuspecting consumers to financial fraud and serious legal risks.

A CPN won't fix your credit, and it can leave you worse off than when you started. But you're not out of options. The National Foundation for Credit Counseling (NFCC) connects people with free or low-cost credit counselors who review your situation and talk over legal alternatives. Reach out to NFCC at 800-388-2227.

Read more >> How to Place a Fraud Alert

If you're considering a CPN, talk to someone first. Feeling out of options is usually what makes the pitch work. But a counselor can tell you whether you actually are. The National Foundation for Credit Counseling connects people with free or low-cost counselors who'll look at your situation and walk through the legal options with you. Call 800-388-2227.

Legal ways to build your credit

Dealing with poor credit can feel overwhelming, but the good news is that it's not permanent. Start with these legal options for building your credit, working down only as far as you need to.

Review your credit reports

You can pull all three of your credit reports free every week at AnnualCreditReport.com, the only site authorized to provide them at no cost. There are three major credit bureaus that issue credit reports: TransUnion, Equifax, and Experian.

Read each of your three reports closely. You're looking for accounts you don't recognize, balances that are wrong, payments marked late that you made on time, and the same debt listed twice by different collectors. Any of these common reporting issues could be hurting your score.

Dispute errors with the credit bureaus

You can't remove accurate negative marks, like late payments you actually missed. But you can dispute legitimate errors directly with the bureaus. Each bureau has its own online dispute portal, though you can also file by mail.

After you've filed a dispute, the bureau has up to 45 days to investigate it. If the dispute is successful, the bureau will update your report with the corrected information and recalculate your credit score.

Get credit for rent you already pay

If you rent, those payments can count toward your credit history. The money is already leaving your account, so you might as well get credit for it.

Check whether your landlord reports to the bureaus, or use a rent reporting service that does it for you. With these services, a company verifies your payments and sends them to the bureaus as positive payment history, so the money you're already spending starts working for you.

Kikoff includes rent reporting on all plans, with verified payments reported monthly to Equifax.

Open a credit-builder account

Even with poor credit or no credit at all, you have ways to build it over time. The hard part is starting, because most credit products require credit you don't have yet.

Credit-builder tools get around that by opening a reported account without a credit check. The Kikoff Credit Account is one such tool that reports your on-time payments to all three credit bureaus, so each month adds to your file whether or not a lender would approve you today.

Ask about becoming an authorized user

If someone close to you has a credit card in good standing, ask if they'd be willing to add you as an authorized user. As an authorized user, their payment history then appears on your report, positively affecting your credit.

Not every issuer reports authorized users to the bureaus, however, so confirm theirs does before you go this route. It's also not without risk. If your loved one misses payments or maxes out their card, that lands on your report too. And iIf you run up charges you can't cover, they're the one legally on the hook for the balance.

This is an option that works best when the account is old, the balance stays low, and you trust each other.

Consider a secured card

Secured cards cost the most upfront, typically requiring a deposit of $200 or more. That deposit then becomes your credit line, which you can use for purchases, paying it off like any other card.

The card issuer holds your deposit as collateral, often returning it when you close the account in good standing or the issuer upgrades you to a traditional, unsecured card. Policies vary by issuer, so ask before you apply what the deposit is, whether they refund it, and whether the application triggers a hard credit check.

Read more >> How to Build Credit From Scratch

Bottom line

A credit privacy number won't give you a clean slate. Using one to apply for credit means misrepresenting your identity on a credit application. And that's fraud, regardless of who sold it to you or what they said it was for.

The pitch works because building credit can feel impossible when your report is working against you. It isn't, and starting doesn't take a credit check. The Kikoff Credit Account reports your on-time payments to all three credit bureaus, no hard credit check required, and plans start at $5 a month.