smartconsumer: Staying Away from Credit Repair Scams - Know

Staying Away from Credit Repair Scams

{What to Know} {What to Do}



You've probably seen ads from companies offering to fix or repair your credit. Some ads promise a “new credit identity.” They tell you that they can help you get a fresh start for your credit history. It may seem like just the thing you need to get your credit back on track, but it’s actually a scam. These companies often sell Social Security numbers illegally. If you use a number other than your own to apply for credit, not only won’t you get credit, but you also could face fines or prison.


If your credit is less than golden, there are steps you can take to improve it on your own and at no cost. Only time and a personal debt repayment plan will improve your credit.

Signs of a Credit Repair Scam

  • You may be seeing credit repair fraud if a company:

    • insists you pay them before they do any work on your behalf

    • tells you not to contact the credit reporting companies directly

    • tells you to dispute information in your credit report — even if you know it's accurate

    • tells you to give false information on your applications for credit or a loan

    • doesn’t explain your legal rights when they tell you what they can do for you

  • Ads that promise a "new credit identity"

Companies promising a “new credit identity” say they can help you hide bad credit history or bankruptcy for a fee. If you pay them, these companies will provide you with a number that looks like a Social Security number. They may call it a CPN — a credit profile number or a credit privacy number. Or, they may direct you to apply for an EIN — an Employer Identification Number — from the Internal Revenue Service (IRS). EIN’s are legitimate numbers. They are typically used by businesses to report financial information to the IRS and the Social Security Administration. But an EIN is not a substitute for your Social Security number.


The credit repair companies may then tell you to apply for credit using the CPN or EIN, rather than your own Social Security number. They will lie and tell you that this process is legal. But it's a scam. These companies may even be selling Social Security numbers stolen from children. By using a stolen number as your own, the con artists will have involved you in identity theft, which is a crime.

Content Last Modified on 2/25/2013 4:40:16 PM