Are "New Credit Files" Real?

One of the services offered by some credit repair companies is a new credit file, completely free of any credit history – good or bad. If you have a sketchy credit history, those ads promising a brand new credit file have probably caught your eye. It sounds too good to be true. Are these new credit files real? Read on to find out.

New file requires a new SSN

Your credit history is tied to your Social Security number. To create an entirely new credit file, you’d need to apply for a new Social Security number. However, the Social Security Administration doesn’t make it easy to get a new SSN, even for people who’ve been victims of identity theft. Credit repair companies have found a way around those rules.

...or new ITIN or EIN

Your new credit file would be created using a Individual Taxpayer Identification Number (ITIN – intended for nonresidents and immigrants) or Employer Identification Number (EIN – used to identify businesses). When you make new credit card and loan applications, you would use your ITIN or EIN in place of your SSN and a new mailing address. Some new credit files are created with a Social Security number that belongs to someone else. It may work, but it’s illegal. Lying on a credit card or loan application is against the law. If you’re caught you could face jail time and a fine, in addition to having to repay the balance of the credit card or loan.

Companies that tell you to create a new credit file are in violation of the Credit Repair Organizations Act (CROA), a federal law that guides credit repair companies.

You can legally repair your credit by removing inaccurate credit report entries, bringing delinquent accounts current, and making timely payments on your existing accounts. For more information on improving your credit, check out these six tips.