Understanding CPNs

A Credit Privacy Number (CPN) is a nine-digit identification number that individuals may use in lieu of their Social Security Number (SSN) for credit-related transactions, under specific, legally permissible circumstances. This guide outlines relevant legal protections, best practices, and precautions to avoid misuse or potential legal consequences.

The use of the 98 number and the 45 number

To understand why you get a 45 number in the Estate Planning section of the Secured Party process it is important that you understand the need to eliminate the use of the SSN as well as the legality of using a Credit Privacy Number (CPN).

Legal Foundation

Under the Privacy Act of 1974, Title 5, U.S. Code § 552a, individuals are protected from being compelled to disclose their SSN, except in cases involving:

•           Employment

•           Tax matters (e.g., dealings with the IRS)

•           Applications for federally insured mortgages

•           Receipt of public assistance

•           Obtaining a driver’s license or registering a vehicle

Specifically, Public Law 93-579 states:

“It shall be unlawful for any Federal, State, or local government agency to deny any individual any right, benefit, or privilege provided by law because of such individual’s refusal to disclose his or her social security account number.”

Furthermore, any government agency requesting an SSN must disclose:

1.         Whether disclosure is mandatory or voluntary;

2.         The legal authority under which the request is made;

3.         The intended use of the information.

Clarifying Misconceptions

While the SSN was originally created to track earnings for Social Security benefits, it has evolved into a de facto national identifier. Its use by private entities is not mandated by law and is often voluntary. Credit reporting agencies (Equifax, TransUnion, Experian) are private corporations, not government agencies. You are not legally required to provide your SSN to them unless legally compelled.

Privacy and Identity Theft Risks

According to the Federal Trade Commission (FTC), millions of Americans are affected by identity theft annually. Victims of fraudulent credit activity often face significant emotional distress, financial losses averaging over $10,000, and an arduous recovery process involving extensive time and effort.

Using a CPN—when done transparently and lawfully—may offer a layer of privacy protection. However, it must never be used to misrepresent your identity, evade legitimate debt obligations, or commit fraud.

How Credit Bureaus Match Identity

Credit bureaus cross-reference the following data points to build and link consumer credit profiles:

1.         Full name

2.         Middle initial

3.         Date of birth

4.         Current and past addresses

5.         SSN

6.         Phone numbers

7.         Employment history

Any overlap in these categories may cause a new credit application or CPN file to merge with an existing SSN-based credit file.

Steps for Establishing a Separate Credit Profile Using a CPN

Important: These steps are not intended to assist in evading lawful debts or misrepresenting one’s identity. Always consult legal counsel before proceeding.

1. Establish New Personal Identifiers

•           Obtain a new phone number, ideally billed to a new address.

•           Change your driver’s license address. If permissible, request a non-SSN-based ID number.

•           Do not reuse previous mailing addresses, phone numbers, or employers.

2. Open New Financial Accounts

•           Open a new bank account using the CPN. Avoid using the same financial institution tied to your

SSN.

•           Ensure the new address and phone number do not match any previous credit records.

3. Apply for New Credit

Use the following information:

•           Full legal name

•           New address

•           New driver’s license number

•           New phone number

•           Date of birth

•           CPN (clearly marked as “CPN ID#”)

•           New bank reference

Avoid Including:

•           Previous addresses

•           Former employers

•           Any reference to prior creditors (even positive accounts)

•           Spouse’s information

Building a Credit History

Start small:

•           Apply for secured credit cards

•           Use credit responsibly and pay off balances in full each month

•           Avoid excessive credit inquiries

Your Legal Rights

You are legally entitled to control access to your personal information. Federal laws supporting your rights include:

•           The Privacy Act of 1974

•           The Fair Credit Reporting Act (FCRA)

•           The Equal Credit Opportunity Act (ECOA)

These statutes affirm that consumers may use alternative forms of identification if not prohibited by law, provided there is no intent to defraud.

Common Missteps to Avoid

•           Do not use a CPN on applications for government benefits or programs requiring SSNs by law.

•           Do not provide your CPN to service providers (e.g., utilities, medical professionals) unless absolutely necessary.

•           Do not use your old checking account, phone number, or address.

•           Do not misrepresent a CPN as an SSN.

Note: Misuse of a CPN, especially in a deceptive or fraudulent manner, may lead to civil or criminal liability under federal law.

Frequently Asked Questions

Q: Is using a CPN legal?

A: Using a CPN for privacy purposes may be legal if there is no intent to defraud and all provided information is truthful. Legal guidance is advised before use.

Q: Do I need to change my phone number and address?

A: Yes. Identity matches are based on historical data. Avoid using previously associated information to prevent file merging.

Q: Can I be denied credit for not disclosing my SSN?

A: Private entities may refuse to do business without an SSN. However, they must inform you if disclosure is voluntary and what it will be used for.