How To Create An Alternate Credit File Legally

Category: Finance, Credit.

Well. you re right. This operation targeted( and took down) over 50 credit repair organizations and companies selling consumers both pamphlets and services giving them a brand new credit file under the pretense it was 100% legal and in some cases even claimed it to be a" government sponsored" program!

It is too good to be true but these types of ads are now surfacing again after the Federal Trade Commission launched" Operation New ID Bad Idea" over 8 years ago. The con was simple. EIN s were obtained from the Internal Revenue Service on behalf of the consumer. Companies would target consumers with bad credit and offer to create a brand new credit file for them by substituting an Employer Identification Number( EIN) for their Social Security Number( SSN) along with a new address. With the EIN and a new address the companies would either have the consumer apply for credit with the" new information" or the company would apply for them. While there is some dispute among privacy experts as to whether or not this is legal, the FTC s actions at the time were not up for debate.

When the creditor would run the application it would automatically create a new credit file because the computer would be unable to find the consumer in the database due to the new address and SSN. Companies were advertising and luring in consumers in order to have them falsify credit applications by providing new information such as their address and SSN in order to obtain credit. As you ll hear me say often" In reality, nothing could be further from the truth" . This was a direct violation of the Truth in Lending Act( TILA) and worse yet, the companies were advertising to consumers that this was 100% legal and in some cases claiming it was a government sponsored program. Privacy experts will argue that using an EIN or 9 digit PIN( simply a made up number) in place of ones SSN is completely legal since creditors are on shaky ground asking for your SSN in the first place. My question" Is concealing ones adverse credit history intent in itself? " While I am not an Attorney on the matter of credit law I can conclude that if a consumer was to create an alternate credit file using the EIN or PIN method they better be darn sure they never have a problem paying their bills.

In regards to the truth in lending act they will argue that one has to exhibit" an intent to defraud" a creditor. If they do, they most likely would find themselves in a courtroom with a case involving credit fraud. How To Create An Alternate Credit File Legally. Which brings me to my next topic. Most consumers are unaware that in addition to consumer credit reports, both Experian and Equifax own and operate business credit reporting services. While some creditors such as residential utility companies will not allow you to use business credit in place of personal credit, we have had numerous clients who have successfully used business credit to obtain credit cards, automotive leases and loans. By creating a business credit profile a consumer can now create an alternate credit file legally.

This technique( although controversial) can be very effective when done properly. Corporation, etc, LLC. ). ) Obtaining an EIN as well as a DUNS number( Dunn and Bradstreet) . ) Borrow and/ or buy products and services from vendors who reports to business credit reporting agencies such as Experian, Equifax and Dunn& Bradstreet. The basics of building business credit involve) Setting up the proper structure for your business( i. e. While building business credit requires time just like personal credit, don t get discouraged. This is when it becomes imperative that one learn from the mistakes of their past. Remember, when you set out to begin building your business credit you are starting with a clean slate. Remember, in the credit world those who do not learn from their past are( inevitably) doomed to repeat it.

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