How to Get a CPN and the Associated Legal Risks

A Credit Privacy Number (CPN) is a term often encountered by individuals seeking to establish or rebuild credit. This article clarifies what a CPN is, explores the legal issues associated with its use, and provides information on building legitimate credit.

What is a Credit Privacy Number?

A Credit Privacy Number (CPN) is a nine-digit number formatted similarly to a Social Security Number (SSN). Companies marketing CPNs often claim they can be used as a separate financial identifier, allowing individuals to establish a new credit identity distinct from their existing SSN. This is frequently promoted as a solution for those with poor credit histories or past bankruptcies.

Despite these claims, CPNs are not legitimate, government-issued identification numbers. No federal or state government agency, such as the Internal Revenue Service (IRS) or the Social Security Administration (SSA), issues or recognizes CPNs for credit purposes.

CPNs are often created through questionable means. Some are entirely fabricated nine-digit sequences designed to mimic the structure of an SSN. Others may be Social Security Numbers stolen from individuals, including children or those who are incarcerated, whose credit files are typically inactive. This practice, whether through fabrication or theft, highlights the fraudulent nature underlying most CPNs.

Legal Ramifications of Credit Privacy Numbers

Using, obtaining, or marketing CPNs carries severe legal consequences, especially when such activities involve misrepresentation or fraud. Utilizing a CPN, particularly if it is a fabricated number or a stolen SSN, can constitute multiple federal offenses. These include identity theft, mail fraud, wire fraud, and making false statements to financial institutions.

Identity theft, for instance, can result in imprisonment for up to 15 years, with enhanced penalties up to 20 or 30 years depending on the crime’s nature. Mail fraud and wire fraud can lead to imprisonment for up to 20 years, or up to 30 years and a fine of up to $1 million if a financial institution is affected. Making false statements to a financial institution can also result in a prison sentence of up to 30 years and significant fines.

CPNs are illegal in practice because they are frequently used to defraud lenders, misrepresent an individual’s true identity, and conceal genuine credit history. Federal agencies such as the Federal Bureau of Investigation (FBI), the IRS, the U.S. Secret Service, and the U.S. Postal Inspection Service actively investigate and prosecute CPN-related fraud.

Building Legitimate Credit

Establishing and improving credit relies on legal and ethical financial practices. For individuals with no credit history, several methods can help establish a credit profile. Secured credit cards require a cash deposit, typically between $200 and $500, which often serves as the credit limit. This deposit minimizes risk for the lender, allowing consumers to build credit by demonstrating responsible payment behavior.

Credit-builder loans are another effective tool. With these loans, the funds are often held by the lender in a locked account while the borrower makes regular payments over a set period, usually 6 to 24 months. Once the loan is paid in full, the funds are released to the borrower, and the payment history is reported to credit bureaus. Becoming an authorized user on another person’s established credit card account can also help build credit, as the primary account holder’s positive payment history may be reflected on the authorized user’s credit report.

Consistent and timely payments are paramount to building a strong credit score. Payment history is the most influential factor in credit scoring models, accounting for approximately 35% to 40% of a FICO or VantageScore. Even a single missed payment can negatively impact a credit score. Maintaining low credit utilization, which is the amount of credit used compared to the total available credit, is also beneficial. Lenders prefer to see utilization rates below 30%.

The length of credit history and a healthy mix of different credit types, such as installment loans and revolving credit, contribute positively to credit scores. Monitoring credit reports regularly is also important. Consumers are entitled to a free copy of their credit report from each of the three major credit bureaus—Equifax, Experian, and TransUnion—annually via AnnualCreditReport.com. Reviewing these reports allows for the identification and dispute of any inaccuracies, which can be done directly with the credit bureaus and the information providers.

CPNs Versus Official Identification Numbers

It is important to differentiate CPNs from official, government-issued identification numbers, which serve distinct and legal purposes.

Social Security Number (SSN)

The Social Security Number (SSN) is a unique nine-digit number issued by the Social Security Administration (SSA). Its primary purpose is to track individual earnings for Social Security benefits and for tax reporting. The SSN is also widely used for identification in various financial and governmental transactions.

Employer Identification Number (EIN)

The Employer Identification Number (EIN) is another nine-digit number, issued by the Internal Revenue Service (IRS). An EIN is used to identify businesses for tax purposes, similar to how an SSN identifies individuals. Businesses use EINs for filing taxes, opening bank accounts, and other official business activities.

Individual Taxpayer Identification Number (ITIN)

For individuals who do not have an SSN but need a taxpayer identification number, the IRS issues an Individual Taxpayer Identification Number (ITIN). ITINs are also nine-digit numbers, formatted like SSNs, but they always begin with the number nine. ITINs are specifically for tax reporting purposes for resident and non-resident aliens and their dependents who are not eligible for an SSN.

In stark contrast to these legitimate identifiers, CPNs are not issued by any government agency and hold no legal standing as an official identification number. While SSNs, EINs, and ITINs are recognized and required for specific legal and financial activities, CPNs lack this official backing and are often associated with fraudulent schemes.