How to Get a CPN and Why You Shouldn’t

A Credit Privacy Number (CPN) is a concept often encountered by individuals seeking to manage their financial standing, particularly those with credit challenges. Misinformation surrounding CPNs can lead to misunderstandings about their nature and legal standing. This article aims to clarify what a CPN is, distinguish it from legitimate government-issued identification numbers, outline the serious legal ramifications associated with its use, and present recognized and lawful methods for building a credit profile. Understanding these distinctions is important for navigating financial decisions responsibly.

Understanding What a CPN Is

A Credit Privacy Number (CPN) is typically advertised as a nine-digit number, formatted similarly to a Social Security Number (SSN), supposedly for credit reporting purposes distinct from an individual’s SSN. Companies selling CPNs often market them as a solution to conceal negative credit history or past bankruptcies. They claim that a CPN can be used to apply for credit, effectively creating a new credit identity.

Despite these claims, CPNs are not issued by any government agency, such as the Social Security Administration or the Internal Revenue Service. They lack legitimate recognition as valid identifiers for credit or financial transactions. The concept of a CPN is primarily linked to scams and illegal activities, often involving fabricated numbers or, in many instances, stolen SSNs, sometimes belonging to children, the elderly, or incarcerated individuals. There is no legal basis for a CPN to serve as a separate, legitimate credit identity.

The notion that a CPN offers a quick fix for poor credit is misleading. Using a CPN to hide credit history is illegal and can be considered identity theft. While some may mistakenly believe CPNs are permissible under the Privacy Act of 1974, this act does not authorize the creation or use of a CPN as a substitute for legitimate identification.

CPN Versus Legitimate Identifiers

A CPN stands in stark contrast to legitimate, government-issued identification numbers, which serve specific and legally recognized purposes. The Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), and Employer Identification Number (EIN) are distinct identifiers with defined uses and issuance processes.

The Social Security Number (SSN) is a unique nine-digit number issued by the Social Security Administration to U.S. citizens and eligible residents. Its original purpose was to track individuals’ earnings for Social Security benefits. Over time, the SSN has become a widely used identifier for various purposes, including obtaining credit, opening bank accounts, and filing taxes. Applying for an SSN and its corresponding card is free of charge.

An Individual Taxpayer Identification Number (ITIN) is a nine-digit tax processing number issued by the Internal Revenue Service (IRS). It is specifically for individuals who are required to file U.S. tax returns but are not eligible for an SSN. ITINs are formatted similarly to SSNs, always beginning with the number nine. An ITIN allows individuals to comply with U.S. tax laws and does not provide legal status or work authorization.

The Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique nine-digit number assigned by the IRS to business entities. Its primary use is for tax filing and identifying businesses for various legal and financial purposes, such as opening business bank accounts, applying for loans, and setting up payroll. An EIN protects an individual’s SSN from being used for business purposes. Unlike CPNs, these identifiers are officially recognized and regulated by federal agencies.

Legal Implications of CPNs

Using or promoting CPNs carries significant legal risks and can result in severe penalties under federal law. The use of a CPN to deceive lenders or conceal a poor credit history is considered fraudulent and can lead to criminal charges. This practice is often associated with identity theft, as many CPNs are derived from stolen Social Security Numbers.

Federal statutes implicated by CPN fraud include mail fraud (18 U.S.C. § 1341), wire fraud (18 U.S.C. § 1343), and bank fraud (18 U.S.C. § 1344). Using a CPN to make false statements on a credit application can also violate 18 U.S.C. § 1014. If a CPN involves a stolen SSN, it can lead to charges of aggravated identity theft (18 U.S.C. § 1028A). These offenses are aggressively pursued by law enforcement agencies, including the Federal Bureau of Investigation (FBI), the Federal Trade Commission (FTC), and the Internal Revenue Service (IRS).

Individuals found guilty of CPN-related fraud can face substantial fines and imprisonment. Penalties for identity theft and fraud can range significantly, with potential sentences of up to 30 years and large fines, depending on the specific charges and circumstances. Even unknowingly using a CPN that turns out to be a stolen SSN can result in legal consequences. The legal system does not differentiate between individuals who actively create CPNs and those who purchase and use them, making both parties vulnerable to prosecution.

Building a Credit Profile Legally

Establishing and improving a credit profile can be achieved through legitimate and recognized financial practices that contribute to a positive credit history. These methods are transparent and contribute to a credit score.

One effective strategy is obtaining a secured credit card. These cards require a refundable security deposit, typically ranging from $200 to $2,500, which often serves as the credit limit. Secured credit cards function like traditional credit cards, with monthly payments reported to major credit bureaus. Responsible use, including on-time payments, helps build or rebuild credit history.

Becoming an authorized user on another person’s credit card can also help build credit. When added to an account, the authorized user’s credit report may reflect the primary cardholder’s payment history, potentially boosting their credit score if the account is managed responsibly. However, the primary cardholder remains responsible for all payments.

Another option is a credit-builder loan, designed for individuals with limited or no credit history. The loan amount is typically held by the lender in a secured savings account or certificate of deposit until the loan is fully repaid. Regular, on-time payments are reported to credit bureaus, establishing a positive payment history. Upon completion, the borrower receives the saved funds.

Consistently making timely payments on all bills, including utilities, rent, and loan installments, is fundamental to building a strong credit history. Payment history is a significant factor in credit score calculations, with on-time payments positively influencing scores and late payments negatively impacting them. Regularly checking credit reports for accuracy from the three major credit bureaus (Experian, Equifax, and TransUnion) is also important to identify and dispute any errors that could affect credit standing. Building a positive credit history requires patience and consistent responsible financial behavior.