Credit Score

3 Credit Scams That Could Land You in Hot Water

Dealing with credit problems can be extremely frustrating…stipulated! You’re constantly being denied mortgages, credit cards, and auto loans. And if you do happen to be approved then you’re likely going to be required to pay higher interest rates for your financing. Bad credit is expensive and it’s embarrassing.

If you are currently working to overcome your own credit issues then bravo! Working hard to educate yourself and to improve your credit is admirable and, when done correctly, can pay huge dividends in the future.

However, the fact of the matter is that your credit history cannot be improved overnight.

Rebuilding damaged credit takes time, potentially years depending on the severity of the damage. Because improving your credit can be such a drawn out and tedious process many consumers are tempted to look for shortcuts to help speed up the process. Unfortunately, some of these so-called “shortcuts” are actually scams that could get you into a lot of trouble. Here are 3 of the more egregious credit scams that you should avoid like the plague.

1. Tradeline Renting or “Piggybacking”

“Piggybacking” on another person’s credit card account can certainly be a very effective way to improve your credit scores, and is perfectly legal and ethical under the right circumstances. When you are added as an authorized user to a well-aged credit card account that has a high limit and a clean payment history you could potentially be improving your credit scores a great deal overnight. And there is nothing wrong or illegal about asking a loved one to add you as an authorized user to his/her credit card account.

Piggybacking only becomes a problem when you pay to be added to a stranger’s credit card account for the purpose of gaming the credit scoring system. This practice, known as tradeline renting, is not as common as it was in previous years. However, there is still an array of shady websites that will connect you (for a fee) with consumers willing to add strangers as authorized users to their credit card accounts.

The problem with tradeline renting from strangers is that if you partake in the practice you could arguably be guilty of committing bank fraud because you are knowingly misrepresenting your credit history. Additionally, you could also potentially be guilty of mail fraud if you used the U.S. postal service to facilitate the tradeline renting or wire fraud if you used the telephone or email.

2. CPN and EIN Numbers

Another common credit scam involves efforts to create and use a new credit file, essentially making your damaged credit reports irrelevant. This particular scam can be especially dangerous to you and it comes in 2 flavors – the CPN number and the EIN number. A credit privacy number (CPN) is generally marketed as a 9-digit identification number that can be used in place of a social security number when applying for credit. An employer identification number (EIN) is how businesses identify themselves to the IRS. The fraudsters who run these scams will try to convince you that they can sell you a CPN or an EIN which you can use to create a new, clean credit file for yourself with all 3 credit bureaus.

CPN and EIN numbers in and of themselves are not inherently illegal. However, if you try to later use the CPN or EIN number in lieu of your social security number on a credit application then you arguably have committed bank fraud (potentially mail and wire fraud as well). When you fill out an application for credit it asks you for your social security number and if you knowingly use a 9-digit number that is NOT your social security number then it’s hard to argue that you’re not committing bank fraud.

Additionally, if your newly purchased “credit identity” turns out to be a recycled social security number (as is often the case with these scams) then you could also be guilty of committing identity theft. If you do not want to risk spending time in an orange jumpsuit then you should absolutely avoid working with anyone who offers to create a new credit report or credit file for you, period.

3. Falsely Claiming Identity Theft

Thanks to provisions within the Fair Credit Reporting Act if you properly report identity theft to the credit bureaus then within 4 days all of the fraudulent accounts must be removed from your credit reports.

This is great news for anyone who has truly been a victim of identity theft. Because of the speed with which the credit bureaus must erase fraudulent accounts from your credit reports scam artists have, unsurprisingly, come up with a way to once again game the system. You can find scam artists who will help you to file a falsified identity theft report (potentially even a falsified police report) who will then submit said report to the credit bureaus in an effort to have your credit reports swept clean of negative information.

Unfortunately for you, if you participate in this scam and cry wolf when you are not actually a victim of identity theft then you could be setting yourself up for disaster. Falsifying a police report or identity theft report is a crime. And you are likely committing mail fraud if you use the U.S. mail system to submit that report to the credit bureaus.

In fact, I’ve been an expert witness in cases where a consumer has falsely cried “identity theft”, was successful getting a large number of derogatory entries off of her credit report, went out and got a loan, and then promptly defaulted on it. Once the bank realized what had happened they contacted the authorities. Long story short, the fraudster is now in prison and will be there for the next 4 years.

About the author

John Ulzheimer


  • Please tell me more about how you think paying to be an authorized user on someone’s credit card is bank fraud. If i am added as an authorized user to someones card there is no fraud happening because I legitimately am an authorized user and as long as FICO accepts this as part of their scoring model then it is fair play. To look at it from another angle you are suggesting that because someone has the privilege of knowing a person or having rich parents with good credit who can add them to their credit card that they deserve a higher credit score.

    • This article is not insinuating people that you know or even family adding you as authorized users. It is referring to companies who charge you a fee to use a “stranger’s” identity. Go back and read the article. That is fraudulent. You do not know the people in any form. And, credit solutions is trying to keep you from spending thousands of dollars and possibly going to jail.

  • Lexington Law firm did NOT help me AT ALL! Was with them for an entire 12 months. After paying all that money and hoping for their honest help, I was STUNNED to find my score was LOWER than when I started! Hummmmm,,,how does that happen? Ive never used any credit, just kept paying down what I needed to! Just be careful. Those who have had good luck with this company maybe had minor credit issues.

  • I was wondering if there is a chance to get approval for a mortgage with a score around 635. I am still trying to improve it, and paying the $40 a mo. for Lexington Law. They have taken some stuff off, but I have a fixed income (disability) and a $55,000 medical bill for when my, then, 17 yr old son fell through the ceiling in the house we rent and broke his thigh bone in half. I feel like I couldn’t pay that in a million years!
    Can someone tell me about my mortgage question
    And about the medical bill issue?? Thanks 🙂

    • Yes it is very possible. Remember there are other factors in purchasing other than credit score. You need to be sure your debt-to-income ratio is not too high, plus show a cashflow funnel through deposits and bank statements. Go search types of loans and the credit score they accept – FHA is as low as 500. However, there are other factors they will consider.

    • Are you sewing the owner of the housie you rent ? Is there a City or County agency that is responsible for doing inspections and issuing certificates of meeting safety standards on rental properties ? It sounds like their insurance companies or their self insured status needs to work out a financial settlement with you. Also I had to go through bankruptcy 15 years ago to get rid of a $100,000 County Hospital Bill after an auto accident, To protect an inheritance that I knew was eventually coming, Maybe you should look into that also ?

  • I couldn’t find any value with Lexington Law either I started off 480 score 18 months ago. 90% were medical bills that went to collections. I took it upon myself to contact them, negotiate a payoff amount and request they immediately removed from my credit when I paid. They agreed. I was able to purchase a home 5.95% interest. I then opened up 4 “bad credit” credit cards and made sure the balance was less than 30%. Within 6 months of paying my mortgage on time and keeping my credit card balance low my score went to 720 where I was able to refinance my mortgage at 3.5%. It is not an overnight process but to go from refused a mortgage to your mailbox being filled with refinance offers in 18 months feels great. Now the second I get a medical bill in the mail it is paid! Also make sure you have 3-6 months worth of bills in savings. Now you can sleep peacefully

    • What percentage of the Collections Bills were you able to get them to reduce them to and agree to remove them and what type of legal document (If any ?) Did they give you insuring that they would Remove the Collections items on your credit report, Before you paid them ??

  • Equifax is not the best credit reporting agency .. I had a lawsuit against them and won. MH credit score kept going down dings left and right . I checked my credit and old creditor I had kept reporting late charges but I had already paid that specific debt off. I reported to all credit reporting agencies which included Equifax, Experian and Transunion. The only one I had issue problems and concerns was Equifax.
    I sent them over 15 demand letters to investigate the situation , after each inquiry Equifax continue he to say it was reporting the finance company as still open with no payments being made. I reached out to the company which took like 3 try’s due to change in management and the office manager wrote a letter of me paying off MH debt like several years previously and Equifax still report negative remarks . I’m at my wits end at this point so I sued them . The other two reporting agencies seen the issue and corrected the problem within the 3 months of me being concerned… good luck!


    I would NEVER do anything illegal to help my credit score or another’s. I have piggy backed my wife (added as an authorized user) on one of my credit cards boosting her credit score overnight by more than 200 points. Her credit was not bad she just didn’t have any established credit while I had better than great credit and have had it for a while.

    Here is why you should use your head when you add an authorized user. Let’s take a teen you want to see get a good start but that teen has been making bad decisions. OK, so you decide to add the teen as an authorized user but cover yourself by keeping the card assigned for his use in your possession. Great this covers you from loses but might still come back to haunt you IF another company issues the teen credit based on the improved credit score he developed from being a user on your account.

    We have an ethical and moral responsibility to lenders who allow us to add users to our accounts. It is to add only those people we believe will not take advantage of a lenders generosity by scamming another lender via their enhanced credit score.

    I have no idea if this scenario has gone to trial in any court but it sure seems to be a reasonable claim a lender could make if they are able to satisfy court rules and establish the card holder as a participant in lending fraud. USE YOUR HEAD BEFORE YOU ADD ANY USER.

  • What I would do if I had to do it all over again with the knowledge I have now. I would have bought the ebook credit secrets and used the letter to stop all the 30 collection agencies that hounded my phone at work and home. Very embarrasing with them call my work and my personnel headquarters to track me down. I would have joined Lexington Law and Credit Repair dot com a lot sooner. I waited over 6 years to do anything. The collection letters stop the calls. But a lot of calls ended because in my state, they can’t sue you after 5 years so you are hard to collect from. Then the closer to the 7 year mark, the stuff starts falling off your credit reports anyways. I learned the hard way. I will never screw up my credit again. I do remember having a score as low as 434! Now I am up to a 732 depending on what fico score rating I am using. Have 3 high limit cards and most of my loan debt paid. Going to buy a property next year using VA loan. But I will have zero debt when I do it. There is light at the end of the tunnel. Get educated and take action and don’t listen to negative fools about Lexington.

  • This insight has a “dah” factor of 15 on a scale of one to ten.

    Most people who find themselves in credit card debt beyond repair were naively reckless or criminal in their intent.

    The initially naive will find their way though the quagmire they have created for themselves via a more sober approach to credit understanding and a modicum of research. The criminal will always seek the short-cut, short-term solution.

    Which are you?

  • I would be careful with Lexington. Wasted money trying them and my score didn’t move in a year. The problem with Lexington is that they only send form letters to creditors/credit bureau’s which do nothing and they don’t 1) deal with inquiries or 2) help with proactive means to rebuild credit. I’m using Credit Pro’s as of a couple weeks ago. Impressed so far but will update after 6 months with results. Just my sharing my experience…

    • 3 years and over $3000 with Lexington Law, they not only did not help me, they destroyed what good I had on my credit.. and refused to fix it… and just brushed me off and wanted more money… Im devasted here.. now have triple the work needs to be done to fix it…hard to sue a company for destroying you when they have a team of lawyers on retainer!!!!!

    • Agree! I wasted hundreds of $’s with Lexington. Equifax Experian and TransUnion hv software that kicks out system generated dispute letters!

    • Been with Lexington for 7 months. Started at 650 now have 712 to 732 depending what fico score rating is used. They took off collections and even a court judgment that was on all 3 bureaus. Plus I help myself during this period to pay down credit card debt. I had a good experience with them. Although they don’t do good with inquiries. Give you form letters for those and didn’t do me any good. The bureaus did respond to them but said they were legit. But that is the only negative.

  • It’s ironic that an ad mentioning the Fair Credit Billing Act appears in your column. Banks have been legally scamming consumers for years and getting away with it, until just a few short years ago.

    • YES THEY HAVE Mister K and Regions Bank Still Does My Friend! My wife and I have money taken from our accounts every month and they say WE DIDN’T TAKE IT! Where did it go if they DIDN’T TAKE $10.00 here and $20.00 there and NO ANSWERS FOR THIS! We have Seniors Free Banking and I confronted the bank manager and told her I think they were taking this money out to pay for a new building and putting some in THEIR POCKETS! IT STOPPED RIGHT THEN! Two years TO THE DATE NOW IT STARTS AGAIN! I went to them and ask what was going on with my wife’s account and they what was happening. I told THE NEW BANK MANAGER THAT MY WIFE’S SAVINGS accounts was being ROBBED.
      She went to her account and looked back and found what I was YELLING about and the search (BEGAN!) right THEN. It was an employee that put it in her investing Port Folly-O.
      Still never got the money that was taken 5 years ago and up till 2 years ago. So be on the LOOKOUT and ask for statements going back as far as you can get them them up to see if there is any thing out of order.
      Just Saying BE CAREFUL and SEARCH IT WELL My Friend.
      Ken W.


    • You may consider senior subsidized housing. You only pay one-third of your income for rent. You would have to get rid of your house if you have one, and settle for a one-bedroom apartment, but it is less maintenance, and much less expense. Consider ditching the car. A lot of senior places offer rides, and free or discounted events, shopping trips, doctor visits, etc. If you ever decide to go this route, shop carefully for a place. Research. Ask around. Not all places are as good as others.

    • I used Lexington Law years ago and ended up calling and reporting them to the BBB, they are Notorious for being “FOOT DRAGGERS” which cost me (and you) quite a bit of money while they purposely took their time disputing items on all 3-credit Bureaus, you see, the Longer they take to complete the job the more money they make, nice little, sneaky trick. They also Disputed a Positive HSBC Card, the only credit card I had at that time and HSBC Closed a perfectly good credit card account because of them. I was Livid. Anyway, once I reported them to the BBB they couldn’t return my money Fast Enough, it was almost comical, but then again, nothing is funny about having bad credit or having to pay someone to fix it. I still have the emails and the BBB Records to prove my story.

  • Light at the tunnel’s end. Thank you! This cedit education has been immeasurably helpful. Had access to this information been available earlier in my life, I would have avoided pitfalls identified here.

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