909. Is "Credit File Segregation" legitimate?
Description
This article is from the Credit cards and Consumer Credit FAQ, by adams@spss.com (Steve Adams) with numerous contributions by others.
909. Is "Credit File Segregation" legitimate?
The deal is this: you apply for an Employer ID number, which
is pretty much indistinguishable from a SSN. You use this number
to establish a new credit acount. So long as you never default on
your bills, you might just get away with it. BUT, there are some
HUGE caveats to this:
- If you have declared bankruptcy and apply for a loan (or life
insurance) greater than $50K, you must disclose this on the
application. If you lie and are found out, your loan could be
called or your insurance cancelled.
- If you default and they find out you had bad credit under another
SSN, they might very well decide to prosecute you for felony fraud.
Although this may be technically legal, it is so close to fraud that
a single slip on your part might well land you in jail.
The FTC has asked the federal district court to issue a permanent
injunction against one perpetrator of these schemes prohibiting them
from engaging in these kinds of practices in the future, and ordering
them to pay consumer redress.
Copies of the complaint and free FTC brochures for consumers titled
"Credit Repair Scams," "A New Credit Identity: A New Credit Repair
Scam," and "How to Dispute Credit Report Errors," which offer tips
on avoiding these types of schemes and correcting your own credit
record, are available from the FTC's Public Reference Branch, Room
130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580;
202-326-2222; TTY for the hearing impaired 202-326-2502.
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