“New Credit Identity”
Stay away from credit repair outfits that talk about “recreating”
you with a name change or new Social Security number. These tactics are always
shady…and, sometimes, they’re illegal.
Crooked credit repair outfits may also tell you that you won’t be able
to get any credit for 10 years after you file for bankruptcy (which is a lie).
Then they tell you that, for a fee, they can create a new credit identity
for you. If you ante up, they typically will direct you to contact the Internal
Revenue Service (IRS) and apply for an Employer Identification Number (EIN)—the
identifying number that businesses use much in the way individuals use their
Social Security number. The credit repair bandit then will tell you to:
- use the EIN instead of your Social Security number to apply for credit;
- use a new mailing address; and
- come up with new credit references.
There’s one problem with this idea: It’s illegal. According to
the Federal Trade Commission:
It is a federal crime to make any false statements on a loan or credit
application. The credit repair company may advise you to do just that. It
is a federal crime to misrepresent your Social Security number. It also
is a federal crime to obtain an EIN from the IRS under false pretenses.
Further, you could be charged with mail or wire fraud if you use the mail
or the telephone to apply for credit and provide false information.
Next: Weasels on Both
Sides |
