What is a credit privacy number (CPN)?

A credit privacy number, or CPN, is often advertised as a way to conceal a less-than-perfect credit history and help repair bad credit. And when you’re trying to get approved for a loan or a line of credit, having an option like a CPN might seem extra appealing. But remember: When something seems too good to be true, it often is.

So how exactly does a CPN work? And is it even legal? Here’s what you need to know.

What you’ll learn:

• A CPN is a nine-digit number that looks like a Social Security number (SSN).

• Some companies sell CPNs as a quick fix for bad credit or a way to hide bankruptcies.

• Using a CPN to conceal your credit history is illegal and may be considered identity theft.

• Building or rebuilding credit takes time and requires responsible credit habits, such as paying bills on time every month.

A CPN is a nine-digit number that’s formatted like an SSN. But it isn’t a substitute for an SSN, even though it’s often marketed as such. CPNs may be advertised as a solution for those with a poor credit history by providing a new, false credit identity.

The Social Security Administration provides SSNs to U.S. citizens and other groups of people, including international students and foreign workers. SSN holders can file taxes, find jobs, open bank accounts, apply for loans and more.

On the other hand, CPNs may be presented as a substitute for SSNs, but they’re not a valid alternative.

So-called credit repair companies claim a CPN can hide bankruptcies or poor credit by being used in place of an SSN by someone applying for new credit. But don’t fall for it: CPNs are often related to other types of scams. Your credit reports will still show any debts and bankruptcies. And misrepresenting your SSN on a credit application is a federal crime.

There are very few situations in which an individual would be granted a new SSN. Restarting your credit isn’t one of them.

Even in those specific situations where someone might need a new SSN, the process isn’t easy. And if it does occur, your identity will still be attached to your old SSN.

Selling CPNs as a way to repair credit is illegal. What’s more, many companies that sell CPNs are selling stolen SSNs of unsuspecting victims—like children, prison inmates or senior citizens—and presenting them as CPNs.

To help protect yourself, stay away from situations that could be credit repair scams. One example of a scam happens when people are asked to pay a large sum of money or provide false information on a credit application. Rather than hiding credit reports as promised, this can lead to the creation of a false identity and the risk of committing identity theft.

It’s advised to be wary of any companies selling CPNs to replace SSNs, especially if you’re trying to rebuild your credit quickly. These companies might request thousands of dollars for a CPN, while the government issues SSNs free of charge. They may also tell you to provide inaccurate information on your credit or loan application as a way to safeguard your identity—all red flags that you’re creating a false identity.

According to the Federal Trade Commission (FTC), the Credit Repair Organizations Act forbids credit repair companies from offering deceptive services. Here are some additional red flags to watch out for:

• Required payment before any work is actually done

• No written contract

• Impossible promises, such as removing true information from your credit file

If you’ve been a victim of identity theft, you can report it to the FTC online or by phone. You should also contact the three major credit bureaus:

• Equifax®: Visit the Equifax website and click on “Freeze your Equifax credit report” or “Add a fraud or active duty alert” to help prevent unauthorized access to your credit report. 

• Experian®: Experian offers several options on their website to report fraud and protect your credit information, from setting up fraud alerts to learning how to respond to identity theft.

• TransUnion®: On TransUnion’s website, you’re able to freeze your credit, set up a fraud alert and more.

Thankfully, there are many ways to rebuild credit over time with responsible use. Here are a few strategies from the Consumer Financial Protection Bureau (CFPB):

• Always pay your bills on time. Making on-time payments each pay period is essential for healthy credit. To help make sure you don’t forget, consider setting up automatic payments or reminders.

• Keep your credit utilization ratio low. Carrying a high balance on your cards can increase your credit utilization ratio and lower your credit scores. Experts say it’s best to keep debt at no more than 30% of your available credit limit whenever possible. 

• Only apply for credit you need. If you apply for a lot of credit in a short amount of time, it could make it look like your financial situation has worsened. So it may be worth holding off on opening any new accounts while you try to rebuild your credit.

• Check your credit reports for errors. Monitoring your credit reports can help you spot mistakes or inconsistencies. So if you notice something looks off, be sure to report it and get it corrected as soon as possible.

• Seek out credit counseling. Rather than trusting your financial situation to a scammer, consider speaking to an accredited credit counselor about things like managing debt and building your credit.

Here are answers to some common questions about CPNs:

Some companies may offer CPNs to take advantage of those who feel overwhelmed trying to build their credit, whether it’s for the first time or after a credit score drop. But using a CPN for a credit application might be considered identity theft, as it will appear that the individual is creating a false identity. And misrepresenting your SSN is a federal crime.

There are ways to build or rebuild credit over time, including using a credit card responsibly. And Capital One has credit cards designed for fair and building credit. Compare cards and apply today.