What Consumers Really Want To Know About CPNs and Tradelines

The pressure to get a good credit score can make it sound tempting to try and take some shortcuts. Two terms you might hear people talking about when they're looking for a quick fix are credit privacy numbers (CPNs) and authorized-user tradelines.

But here's the thing - these two products aren't the same thing, and they come with very different risks and repercussions. Before you hand over any cash for a service, you should make sure you know what they are, how they affect your credit report, and what to watch out for.

What Exactly is a CPN?

A CPN is often touted as a nine-digit number that lets you use it instead of your Social Security number when dealing with credit-related stuff. Some people also call it a credit profile number or credit protection number.

Just to be clear, a CPN is not a government-issued replacement for your Social Security number.

Be super careful if a company tells you that a CPN can create a brand new credit identity or hide your existing credit history. The Federal Trade Commission warns that companies making those claims might be using stolen Social Security numbers or trying to get people to get Employer Identification Numbers under false pretenses.

An EIN is something the IRS gives businesses to identify their tax accounts - it's not meant to replace your Social Security number on a personal credit application.

And here's the scary bit - using a number that doesn't belong to you, or lying on a credit application, can land you in serious trouble. The FTC warns that consumers who use a number other than their own on a credit application could face fines or even be sent to prison.

What is a Tradeline?

A tradeline is basically just an account that's listed on your credit report. Credit cards, car loans, mortgages, student loans and other accounts that are reported to the credit bureaus all show up as separate tradelines.

A tradeline can include things like:

• What type of account it is
• When the account was opened
• The current balance
• The credit limit or original loan amount
• The account's payment history
• Whether payments were late

Tradelines aren't inherently suspicious - they're a normal part of the credit-reporting system and help lenders figure out how well you've handled debt.

So where things can get confusing is when people start talking about buying access to someone else's tradeline.

How Authorized-User Tradelines Really Work

A primary credit card holder can ask the card issuer to add someone else as an authorized user. The authorized user can normally use the account, but they're not usually on the hook for paying the balance.

If the card issuer reports authorized users to the credit bureaus, the account will show up on the authorized user's credit report. A well-managed account with a long history, low balance and consistent payments can be a real plus, but an account with late payments or high credit utilisation can actually hurt your credit score.

FICO has said that authorized-user accounts can have either a positive or a negative effect on your credit score - it just depends on the account's history. Newer FICO scoring models might even give these accounts less weight than accounts where you're the primary borrower.

Authorized-user status can be a good way to build credit among family members - for example, a parent might add a young adult to a credit card to help them get started with a credit history.

The Consumer Financial Protection Bureau did some research that found that authorized-user accounts helped some people get their first credit records, but newer scoring models might treat them differently from accounts you opened in your own name.

Why Buying Tradelines Is Just Different

Some companies will sell consumers a chance to be temporarily added as an authorized user on someone else's credit card - this is often called tradeline renting or credit piggybacking. You don't get to use the card or make any purchases - the goal is just to get the account on your credit report for a bit.

And even when you do get the account on your report, there's no guarantee of what will happen - credit-scoring systems are all different, lenders use different scoring models, and they might be looking at loads of other things when they make their decision.

They might look at things like

• Your income and employment
• Your debt-to-income ratio
• Recent credit applications
• Existing monthly obligations
• The accounts you already have
• The accuracy of the application
• Where the authorized-user account came from

Having a good credit score doesn't guarantee you'll get approved for a credit card, a good interest rate, or even a rental agreement.

CPNs and Tradelines Shouldn't Be Treated as the Same Thing

Some companies offer CPN and tradeline packages, which can make it sound like both products are part of the same credit-building process. That can make it sound like they're two parts of the same credit-building process, but they really need to be looked at separately.When you get added as an authorized user to a real account that a lender has made available - that's got nothing to do with plugging in an unfamiliar id number on an application.

The tradeline part of things is all about account data that's sent off to the credit bureaus. The CPN deals with all the identity details you are presenting to a creditor , a landlord , a utility company , or any other organisation.

Consumers always think that because they're buying a package that means everything that comes with it is okay with lenders but that just aint so - you need to do your own digging on whether the number has been created properly , who it's actually meant to belong to , how it's supposed to be used , & whether the information you are being asked to hand over is actually any good.

Warning Signs of a Credit Scam

Any promise of instant results is a dead giveaway that something is up. Improving your credit is a bit more complicated - it usually involves sticking to good habits for a long time.

Be on your guard against companies that:

• Promise a specific credit score will be reached
• Tell you they can give you a completely new credit identity
• Suggest you replace your Social Security number
• Tell you to enter in some dodgy information
• Say that accurate bad history can just be erased overnight
• Tell you not to bother contacting the credit bureaus
• Encourage false reports of identity theft
• Demand money before doing any actual work to improve your credit

The FTC says that credit repair companies aren't allowed to remove any info that's actually accurate and up to date. They also can't charge you before doing the promised work.

Safer Ways to Improve Your Credit

Legit credit improvement takes a bit longer , but youve got some proper options.

Start by having a good look over the reports from the 3 major credit bureaus. You can get a free weekly report through AnnualCreditReport.com. Look out for any accounts that don't belong to you , balances that are wrong , duplicate debts or payments that were marked as late when they weren't.

When you spot an error , dispute it with the company that did the report & the business that gave them the info. The CFPB reckons you should be clear about what the error is & include some proof that backs it up.

After that you might want to try some of the other credit-building steps such as:

• Paying every bill on time
• Reducing those credit card balances
• Not applying for credit unless you really need it
• Getting a secured credit card
• Taking out a credit-builder loan
• Becoming an authorised user on a trusted relatives account - as long as they've got a good credit score
• Keeping accounts you opened a while back open - if its sensible to do so
• Making a plan to pay off your debts

These strategies may take a bit longer but they build a picture of your credit history based on how you really behave with your money

Ask Questions Before Buying Credit Services

Before shelling out for any credit-related services , get them to write down exactly what they will do , how much it will cost , if there are going to be any ongoing fees & what your options are if you change your mind.

You should also ask if they can guarantee results , how they will protect your personal info & if they need any information that's incomplete or wrong to do the work.

A reputable company should be able to explain what they do without making promises about what your credit score will be or telling you to lie about your identity. Consumers considering bundled services can also learn more about CPN packages and carefully review what is included before making a purchase.

Making an Informed Decision

CPNs & tradelines are often sold as quick fixes but they are two different things & each has its own set of risks. A legit authorized-user relationship can potentially help build up a credit history - but its never a guarantee of anything. A number that is touted as a replacement for a Social Security number is a much more serious issue - especially if it's used for hiding who you are or giving false information on applications.

Your best bet is to understand what is being offered , check out every claim & keep your personal info safe. And avoid anything that involves lying or pretending to be someone else. Your credit score is better built if you report accurately & behave sensibly with your money

This is an educational article for consumers. It's not meant to be taken as any kind of legal or financial advice.