March 13, 2007

• 
  NEWS: Alternative Credit Files Stir Controversy

  Imagine that, overnight, you could start anew with your credit – create a clean slate, free of the blemishes that daily life (a late fee or two, a month where ends just did not meet) has a way of imprinting on your credit file. If it sounds too good to be credible, that's because it actually is. It seems, however, that some are enjoying the benefits of a spanking new credit report, by creating a new one.
  
  You may have seen ads on the internet for companies offering to create a new credit file for you, even claiming that it is government sponsored – 100% legit, in other words. These are anything but kosher, however – eight year ago, the Federal Trade Commission rolled out "Operation New ID Bad Idea" to take down the first wave of these shysters, and discourage the public from believing that such an idea was possible. It seems that time has diminished the perceived threat to these companies, however, and they are popping back up in multitudes.
  
  What is the premise behind all this? Well, simply put, creditors skirt a thin line when they "require" your social security number –the benchmark of your credit file with any major reporting bureau- to open an account with you. By obtaining an IRS-issued EIN (employer identification number), or even using a made-up string of 9 numbers, you will by default create a new credit file when applying for and obtaining a new loan or line of credit, as the number will not be recognized. In the strictest sense, none of this is technically illegal – people owning and operating legitimate businesses do, in fact, hold credit that is separate from their personal accounts. Taking matters into your own hands, however, and creating a business credit "history" for a nonexistent corporation is seriously risky business, as it does in fact constitute intent to lie to creditors. If you don't pay your bills on your "new" credit, you may well find yourself in court for credit fraud. Simply put? It's just not worth the risk – stay away from these scams!
  
  
     Back to News Main Page