Can You Really Get a New Credit Identity?

Have you received an email lately that promises to help you get a new credit history? Some companies are make claims that they can give you a fresh start, a new chance to get credit without having to worry about your past mistakes.

Unfortunately, those claims are not only false, they can also get you in serious trouble with the law!

Here's How the "New Credit Identity" Scam Works

The companies in question get the email addresses of people who have had problems with their credit, and then they send them an email that promises to help them overcome their credit problems and give them a new start. This is sometimes known as file segregation. But what they don't tell you is that what they are proposing is illegal.

First of all, these companies will ask you for a fee and then will give you the following instructions:

Obtain either an employer identification number, or a tax identification number (the number used to collect taxes from customers or people who are working for you).
Whenever you apply for credit, use this number instead of your social security number.
Use a different mailing address so that nothing connects you back to your real credit history.

Sometimes the companies will even provide you with the official government forms and instructions for filling them out. This process sets up a ‘shield” so that the person considering extending you credit cannot see the real credit report attached to your social security number.

Why Not? Because it's Illegal!

The problem with this system is that it is illegal for a two reasons:

You can be fined or imprisoned for falsely representing yourself when applying for credit.
It is illegal to obtain a tax identification number, or an employer identification number for any other purpose than what they are intended for. In fact, the application forms for these numbers require that you sign under the penalty of perjury. In other words, if you sign knowing that you are going to misuse it, you can be convicted of perjury - a federal offense.

In addition, if you mail, phone, or fax in your application, then you have committed mail fraud (the use of mail or telecommunications to commit an illegal act.) Finally, if you do manage to fool the system and get a new credit identity, and then default on those payments, the lender will then have the right to sue you for fraud.

You Still Have Other Options

Still think that getting a new “credit identity” is a good idea? While it may seem to be the easiest route to get your credit in order, it's actually a big risk that will probably leave you in worse shape than you are now. If you have bad credit, you still have options, though they will take some time. The best way to start is by obtaining your credit report and searching it for false information.

Summary

If you get an email stating offering a quick and easy way to wipe your credit slate clean, give it a quick toss into your trash bin.
Even if you fill out legal government documents to get your an employer ID, you may be doing so illegally if you are doing it for the wrong reasons.
"New Credit Identity" scams are illegal because they require you to falsely represent yourself.
There are still options for repairing your credit, though they will take time and effort

Now that you know how to fix your credit report, it's time to get started chiseling away at your accumulated debt. If you have any doubts that you might have a fiscally unsound status, take a look at our article How Do You Know if You're in Debt.