How to Do a CPN: The Risks and What to Do Instead

Credit Privacy Numbers (CPNs) are often presented as a method to establish a distinct financial identity. This article aims to clarify what CPNs are, reveal their true nature, and provide guidance on legitimate and effective strategies for building and repairing credit.

Defining Credit Privacy Numbers

A Credit Privacy Number (CPN) is advertised as a nine-digit identifier, similar to a Social Security Number (SSN). Proponents suggest it offers an alternative to using an SSN for credit purposes, often targeting those with damaged credit or limited history.

However, in practice, a CPN is often a fraudulently obtained Social Security Number, a number that has been fabricated, or an SSN stolen from another person. Legitimate financial institutions and credit bureaus do not recognize CPNs as valid identifiers for credit applications. Using anything other than a government-approved identification number, such as an SSN or Individual Taxpayer Identification Number (ITIN), for credit applications is considered fraudulent.

The Illegitimate Nature of Credit Privacy Numbers

Credit Privacy Numbers are not legitimate alternatives to Social Security Numbers or Individual Taxpayer Identification Numbers for credit purposes. Federal agencies, including the Social Security Administration, the Federal Trade Commission (FTC), and the Consumer Financial Protection Bureau (CFPB), do not endorse or recognize CPNs as valid credit identifiers. The Social Security Administration states that using a CPN in place of an SSN for financial activities is unlawful.

Companies that sell CPNs often engage in deceptive practices, falsely promoting these numbers as legal tools for credit repair or for obtaining new credit. These sellers might claim that CPNs are “tri-merged with the Social Security Administration” or cite the Privacy Act of 1974 as justification for their legality. However, the Privacy Act of 1974 simply states that individuals cannot be forced to disclose their SSN unless required by federal law, it does not authorize the use of alternative numbers for credit applications.

The use or promotion of CPNs involves misrepresentation, fraud, or identity theft. Such practices can include using stolen SSNs to create a seemingly “clean” credit profile. This can lead to significant issues for the individuals involved.

Legal and Financial Risks of CPN Use

Attempting to use a CPN carries severe legal ramifications, constituting a federal crime. Individuals who use a CPN instead of their legitimate Social Security Number to apply for credit may face charges for making false statements to financial institutions, which is a violation of 18 U.S.C. § 1014.

Furthermore, the use of CPNs often involves elements of mail fraud (18 U.S.C. § 1341) and wire fraud (18 U.S.C. § 1343). If the CPN is a stolen Social Security Number, the individual could also be charged with identity theft under 18 U.S.C. § 1028. Penalties for these federal offenses can include substantial fines and imprisonment, with some identity fraud charges carrying a maximum sentence of up to 30 years.

Beyond the legal consequences, using a CPN will not build legitimate credit and often leads to considerable financial losses. Individuals pay significant amounts to CPN sellers for a number that provides no legal or financial benefit. Credit bureaus and financial institutions detect CPN misuse, and if discovered, they may close accounts, deny applications, and impose penalties. This can result in an inability to secure legitimate loans, credit cards, or other financial services. Law enforcement agencies actively pursue cases involving CPN fraud.

Legitimate Ways to Build and Repair Credit

Building and repairing credit legitimately involves consistent, responsible financial habits over time.

One effective strategy is to obtain a secured credit card, which requires a cash deposit that typically serves as the credit limit. This deposit minimizes risk for the issuer, making these cards accessible to individuals with limited or no credit history. Responsible use, including making on-time payments and keeping balances low, is reported to the major credit bureaus, helping to establish a positive payment history.

Another useful tool is a credit builder loan, where the loan amount is held by the lender in a locked account while the borrower makes regular payments. Once the loan is fully repaid, the funds are released to the borrower. These payments are reported to credit bureaus, demonstrating a consistent payment history and contributing to a healthier credit mix.

Becoming an authorized user on a trusted individual’s credit card can also help build credit. When the primary cardholder maintains a good payment history and manages their credit responsibly, that positive activity can be reflected on the authorized user’s credit report. This method can help improve credit utilization and the length of credit history, both of which influence credit scores.

Reporting rent and utility payments to credit bureaus can contribute to a credit history, especially for those with a limited credit file. Services like Experian Boost or Rental Kharma can help facilitate the reporting of these payments, which are not traditionally included in credit reports. Consistently paying all bills on time is a fundamental practice, as payment history is the most significant factor in credit scoring models. Even a single late payment can negatively impact a credit score.

Maintaining low credit utilization is also important, generally aiming to use less than 30% of available credit. This can be achieved by paying down balances early, making multiple payments within a billing cycle, or requesting credit limit increases. Regularly reviewing credit reports from all three major bureaus—Experian, TransUnion, and Equifax—is a proactive step to identify and dispute any inaccuracies. Correcting errors can prevent them from negatively affecting credit scores and ensure the credit report accurately reflects financial behavior.