New Legal Credit File




New Legal Credit File...sound tempting???

Of Course it does!!



too many bills

Your workplace cuts your hours AND your pay due to budget constraints. Your just happy to still have a job.

The credit cards are only getting minimum payments and now your car is acting up!



So you get another job to ease the burden, but the added hours puts your life in chaos and you missed paying some of those credit cards. You just want to get out from all of this and then you see the ad.


Get a new legal credit file, solve all your bad debt problems!!!!

Some claim you can do this in 24 hours and some say you will achieve triple A credit in less than 30 days. They all say it's 100% legal and some even suggest its backed by the federal government.

This is not a new idea. The federal government has been fighting this ploy for several years now.



The case in favor of a new legal credit file



One; that your social security number is being misused by many businesses and financial institutions that many times do not have the right to ask you for this number.

    Its original purpose had only been to track the amount of money you make in order to determine your social security benefits at retirement.

    Therefore the only instances that deserve the disclosure of this number would be employment, dealing with the IRS, and mortgages that are federally insured.


    With the increasing rise of Identity theft this is a pretty solid argument.




2nd: in line of defense of a new legal credit file is that all you are doing is applying for a taxpayer identification number (TIN) or Employer identification number (EIN) this one is usually in the case of starting a business but estates and trusts also use this number.

    Many people do this regularly for many different situations.

    The reasoning (besides the idea of creating a new identity) is that you are trying to retain your privacy.


    Who doesn't want that these days.




The truth behind a new legal credit file




Now for the down side and reality part of creating a new legal credit file.

    Even if you do create a new credit file and you are able to do it in a legal fashion the old one still exists. If you have debt, you still owe that debt. Do you think you can apply for a mortgage with a new created identity?

    You could, but you would still have to include your original social security number as you most likely would be considered to be falsifying documents and withholding information or worse be charged with committing fraud.


    That Truth In Lending Act that lenders have to abide by goes both ways legally.





You cannot legally obtain two social security numbers.


There are, though, instances when one is able to legally change their number such as in an identity theft situation.

The companies and persons suggesting that you can get a new legal credit file are really suggesting a new EIN.

The hyphen for this number is placed differently and to be using it in a legal fashion that hyphen needs to go where it should be placed OR a notation that the number used is other than a social security number.


Yet more often than not, the spaces for the numbers on applications are automatically spaced for social security numbers.


Since this is the case many people just fill in with the new number in the manner provided for them.


Usually there are no repercussions, Yet do you want to be the one that does find a problem? How far will you go with this till you do find a problem?



the argument for a new file



Some of the proponents of creating a new legal credit file claim that many times negative items can remain on ones report past the 7 year time limit.


WELL that IS what credit repair is about!


If you take the time to regularly check your report and clear out what doesn't belong there you don't need to create a new identity to do so. That seems like a whole lot of extra work compared with a job that is the equivalent to spring cleaning!


Along with the fact that the threat of identity theft is growing and checking for activity that was not initiated by oneself or correcting mistakes, inaccuracies and negligent incorrect information on your credit report is becoming more and more of an important must do routine.

That goes the same with your checking and bank accounts, once in a while or as with a bank account even once a month just doesn't cut it any more.


One thing I clearly got out of this, and is a strong thought for consideration, aside from the trying to create a new legal credit file, is that private organizations do not have any authority to ask for your social security number.

Credit bureaus are PRIVATE businesses with a bit too much power if you ask me.


    This is where an alternative TIN could be useful if you want to start to consider making your financial life a bit more private.

    When state, federal or local government asks for your number they must tell you how it will be used and if it is mandatory to disclose it.



The companies suggesting a new legal credit file also tell you the following are needed.

BEFORE applying for a TIN / EIN#

    1) A second or new residence address/mailing address. They ask you not to use an address of a person with the same last name or an address where you have lived before.

    Relatives with a different last name in another city or town is the favorite new residence or they suggest the use of an address of a business (preferably your business) or a business that provides mail boxes or mail drops.

    2) A new unlisted phone number-- changing your phone number to get an unlisted phone number or an additional unlisted one.

    3) A phone number obtained from an answering service that provides voice-mail get a voice mail phone number in the same area as your new address. Use this number on your new credit applications.



The following steps need to be taken AFTER applying for a TIN/EIN#:

    1) Change the address on your drivers license to your new address.

    2) Have your SSN# taken off your license. (You should do this anyways regardless of this venture) Request another number or ask to use your new TIN/EIN number.

    3) Establish a bank account within the area of your new residence/mailing address.



This all seems like much too much work to me and hinging on dishonesty. I suppose if you DO want a new identity regarding credit you do need mostly new info.


To keep this "technique" on the legal side you have to be open with those that you are giving this information to that the new number IS NOT your social security number and that you have no intention of using that number as you are worried about identity theft and securing your right to privacy.


Therefore those that you do business with in the way of credit after you would obtain this new legal credit file would need to know that they are receiving an EIN not your social security number as the tax identification number of yourself.


Another way to make it legal



    Others suggest that the only way to create a new legal credit file or alternative credit file as they call it is to actually form a new business and use an EIN.


    That number even though it is attached to your name is really attached to whatever business you create. Those that suggest this "system" name many activities that you can do to create a business such as selling on ebay, cleaning services, repair services ect.


    Once you've decided on a business and a name you set up a structure such as a corporation or many peoples favorite LLC.
    This stands for limited liability company. It acts like a corporation without the formalities of one. Many small business persons choose this.

    You then apply for your EIN and a DUNN (Dunn and Bradstreet) number. Dunn and Bradstreet is the commercial version of the credit bureaus.

    Then purchase supplies from vendors that report to business credit reporting agencies such as Experian, Equifax and Dunn and Bradstreet.




In both instances you are starting over. When the information you give to creditors gets into the Credit Reporting Agency's data banks nothing will come up as it is a fresh new account they have no data on you.

You are brand new with no credit so building credit will take time.



Now lets look at how the Federal Trade Commission looks at all of this.

    If it is a "scheme" to hide your true credit identity then they call this File Segregation.

    It is considered illegal. Depending on what you do with this you could face fines and even possible jail time.

    It is a Federal offense to make false statements on a loan or credit application. Being a Federal offense makes it that much more serious. Further you could commit mail or wire fraud by providing false addresses or telephone numbers on credit or loan applications.

    It is also illegal to obtain an EIN under false pretenses. Additionally state law can step in and charge you with a civil fraud case.



Welllll!!! after reading this I, for one, certainly would not risk any of the above possibilities just because I wanted the magic credit fairy to come and make it all go away!!!!


    In the end being honest and working hard on your original credit report is the best option (in my opinion). Add in a little patience though difficult it will result in a better situation.


    The restraint and structure needed to turn a bad credit situation into a good credit situation is just what is needed to insure that the same thing will not happen again!!


    If you just create a new credit file what will you learn from the experience?


    You may make a bad situation worse by adding more debt to a load you already carry. In fact I see this as a possibly dangerous situation!!



On the other hand,

If the reason for seeking a new legal credit file is that of bankruptcy or judgments on your report JUST REMEMBER>>>>>>>>


Credit reports are based on the last two years of credit. Though the bad remains for several years, time and good credit added to your report do much to erase the bad.


Additionally I want to note that if you go to the IRS.gov website you will notice that there is no application for a separate TIN you either have to use your SSN as your tax identification number or an EIN. Some make it appear that there is an alternative TIN you can apply for. Not so anymore!!


If you look at the area at the IRS site that asks whether you NEED an EIN (employer identification number) as a business, you need to answer yes to at least one of those questions.



Otherwise you do not even need the EIN and in that case if you apply for one anyway and create a new legal credit file will it actually be legal?




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