Can I Create a New Credit File or Credit Identity?
You've probably seen the ads: "Legally create a new credit file!" For a fee of $19 to $49, they will sell you the know-how to create a new credit file, supposedly, so that you can obtain loans and credit cards and overcome your bad credit rating. Can you really create a new credit file? The answer is an emphatic no, but you are probably curious as to how sellers of this information claim you can create a new credit file. You don't have to pay anyone to tell you how you can create a new credit identity because we're going to tell you how they claim you can do it free of charge right now.
When you apply for a credit card, loan or any type of financing you are asked for your social security number. Your social security number is the main way that the three credit bureaus, Experian, Equifax and Trans Union and many creditors and employers, etc., keep track of you and separate your credit file and personal information from everybody else. Therefore, to create a new credit identity or file, one would need a new social security number. Since it is almost impossible to get a new social security number from the Social Security Administration, those who sell "create a new identity" information advise you to apply to the federal government for an Employer Identification Number (EIN) or Taxpayer Identification Number (TIN) and use that number in place of your social security number when you apply for a loan or credit card. They might also advise you to make up a social security number or steal one from someone else.
There is a problem with doing any of the above in that it is a felony to lie on a credit or loan application. If you decide to try this, the mortgage lender or whomever you try to defraud will likely catch it, and if they do, they have the right to turn the whole matter over to your local district attorney for prosecution. First offenders convicted of bank fraud usually get a two year prison sentence.
People who sell "credit a new credit identity" information are scam artists who are in violation of the Credit Repair Organizations Act, which is federal legislation that bars anyone from claiming that consumers can create a new credit identity. In fact, several years ago, the Federal Trade Commission went after many sellers of this information, shutting down their websites and email scams, and made those who hadn't already spent the money reimburse their customers.
If you have a bad credit rating that is preventing you from getting the credit and loans you need, why not start improving your credit rating the legal way? Congress enacted legislation in the 1970s that gives all consumers the right to a fresh start; the right to build an excellent credit rating and not have to suffer their entire lives for mistakes made long ago. This legislation is called the Fair Credit Reporting Act.