To know the truth behind credit privacy numbers (CPN's), Shelf Corps, and buying tradelines.

1. The Truth Behind
Credit Privacy Numbers (CPNs),
Shelf Corps,
and Buying Tradelines

2. Ty Crandall, CEO
(877) 600-2487
www.CreditSuite.com
info@creditsuite.com
Grab Your Free Guide to Building Business Credit
www.CreditSuite.com/ein

3. What is a CPN?
• A credit privacy number or credit profile number,
CPN, SCN, or Secondary Credit Number, is a nine-
digit ID that can be used as an identifier in cases
where you need privacy
• Like a SSN, a person can only have one CPN
• It’s used as a unique identifier for your financial
transactions and lets lenders and credit reporting
agencies keep an eye on your borrowing history

4. What is a CPN?
• A CPN can help you keep your finances
safe and hidden from the public eye
• For that reason, it’s popular among
elected officials, celebrities and people in
witness protection
• It’s mostly used by people who need a
little extra privacy

5. What is a CPN?
• For example, celebrities use it because the media can
use their SS# to track what they are buying and where
they are simply by tracking their credit cards
• Further, in example, congress holds
special privileges to the law; therefore,
their privacy needs to be protected
• In another example, witnesses under
protection can be located if they use
their true social security number for
transaction
• This is the reason why there is the
existence of a Credit Privacy
Number program

6. What is a CPN?
• You are only required by law to disclose your
Social Security Number to the Internal Revenue
Service, your employer, when registering a
motor vehicle, buying a firearm, or applying
and obtaining a federally-insured loan such as
FHA
• So you can’t use a CPN for many things
including IRS documents, for an employer,
registering a vehicle or applying for a
government loan

7. Why Use a CPN
• The theory is if you give lenders a different nine-digit
number, they won’t be able to find your legitimate
credit reports
• And if they can’t find your legitimately lousy credit
reports, they’ll approve your applications and start
reporting the account information to the credit
bureaus using the CPN, thus establishing a new
credit report for you that is not connected to your
legitimate credit report

8. Why Use a CPN
• The supportive argument is that you’re not
required to give a lender your Social Security
number (SSN) when applying for credit, which is
100% true
• You can certainly choose to withhold any
identifying information from your lenders, but
they can also choose to deny your application
as a result.
• What you CAN’T do legally is miss-represent
your SSN

9. Why Use a CPN
• If you choose to withhold your SSN from a lender
and you wanted to not become a criminal, you’d
have to go no further than leaving the SSN box
empty
• If you chose to place one of these CPNs (or
another fake nine-digit number) in the SSN field,
you will have just committed a Federal crime
• In fact, according to the Federal
Trade Commission lying on a
credit application and
misrepresenting your SSN are
both Federal crimes

10. CPN Fraud
• You cannot use a CPN in place of your
SSN… it’s actually FRAUD!!!
• And you can face being charged with ID
theft, if the SSN was stolen

11. CPN Fraud
• Anyone can get a CPN for free
• So don’t be fooled by anyone selling you a CPN,
especially if they tell you it’s already “established”
• In many of those cases, the CPN they are selling is
actually a real person’s SSN, maybe a child or
someone who is deceased
• Tread lightly with anyone who is talking about you
getting a new identity, that doesn’t really exist

12. CPN Fraud… What to Look For
• The company tells you it’s perfectly legal to
apply for credit using a CPN in place of your
SSN
• The company tells you to use an EIN to apply
for personal credit
• The company demands that you
pay for a CPN
• The company promises that you’ll
no longer be associated with your
old credit accounts

13. From Consumer FTC.Gov
• Companies promising a “new credit identity” say they can help you hide bad
credit history or bankruptcy for a fee. If you pay them, these companies will
provide you with a nine-digit number that looks like a Social Security number.
They may call it a CPN — a credit profile number or a credit privacy number
• The credit repair companies may tell you to apply for credit using the CPN,
rather than your own Social Security number. And they may lie and tell you that
this process is legal. But it's a scam. These companies may be selling stolen
Social Security numbers, often those taken from children. By using a stolen
number as your own, the con artists will have involved you in identity theft
• If you follow a credit repair company’s advice and commit fraud, you might find
yourself in legal trouble. It’s a federal crime to:
• lie on a credit or loan application
• misrepresent your Social Security number
• The bottom line is that if you use the number they sell you, you could face fines
or time in prison

14. From TransUnion…
• According to Cliff O’Neal, TransUnion’s spokesman,
• “TransUnion does not use these so-called CPNs; we
accept and report SSN as an identifier. TransUnion
has checks and balances in its systems if someone
attempts to use these numbers in place of their
issued SSN. For example, we provide alerts designed
to help creditors discover if the number provided in
the SSN field on a credit application is not a valid
SSN, or is an actual SSN of another consumer.”

15. From Equifax…
• According to an Equifax spokesperson,
• “Equifax does not issue or recognize
CPNs as an acceptable form of personal
identifiable information.”

16. From Experian…
• According to Experian,
• “Experian does not issue such a number
(CPNs) and does not recognize them as
valid. If a person uses a number other
than their own Social Security number
they may be at risk of committing fraud if
that number is a valid Social Security
number belonging to another individual.”

17. From the Social Security
Administration…
• During a 2011 Social Security Administration field hearing, Robert
Feldt, Special Agent-in-Charge of the Social Security
Administration Office of the Inspector General’s Dallas Field
Division said,
• “Numerous unscrupulous agencies and organizations are
providing CPNs—also known as Credit Profile Numbers and
Credit Protection Numbers—for a fee, as a method of creating a
new, separate credit file for individuals with low credit scores,
bankruptcy, and slow or late payments on their current credit
record. Websites offering CPNs advertise a new credit file with
the use of a CPN, at costs ranging from about $40 to as much as
$3,500. Despite what many of these credit repair Websites imply,
consumers should know that CPNs are not legal.”

18. From the FTC…
• The Federal Trade Commission has also weighed in on the subject:
• “Companies promising a ‘new credit identity’ say they can help you hide
bad credit history or bankruptcy for a fee. If you pay them, these
companies will provide you with a nine-digit number that looks like a
Social Security number. They may call it a CPN — a credit profile
number or a credit privacy number.”
• Often, scammers purporting to be selling CPNs are selling stolen Social
Security numbers instead, the FTC warns. Scammers often use Social
Security numbers stolen from children for this purpose. And you could
actually unwittingly be committing identity theft if you apply for credit
using a stolen Social Security number

19. More From the FTC…
• Promoting False Identification Numbers To
Create A "New Credit Identity" Is Illegal:
FTC
• https://www.ftc.gov/news-events/press-
releases/1999/10/credit-identity-
defendants-settle-ftc-charges

20. CPN Summary
• CPN do exist, and are legal
• But their intent is for specific situations that warrant
privacy
• CPNs can NOT legally be used in place of a SSN,
for any purpose including the application of credit
• In doing so you are lying on a credit application
and misrepresenting your SSN… both of which
are Federal crimes

21. Decoding Shelf Corporations

22. Shelf Corporations
• A shelf corporation is a paper or shell
corporation that is administratively formed
and then "put on a shelf" for several years to
age
• The term "shelf" or "aged" only
refers to the fact that the
company has already been
filed and is sitting "on a shelf"
waiting to be purchased

23. Shelf Corporations AKAs
• Also called
– aged corporations
– seasoned shelf
corporations
– off the shelf company
– Shelf corps
• NOT the same as shell corporations
– Shell corporations are completely different
entities, both in scope and in formation
– usually have no significant assets or
operational structure

24. Shelf Corporations
• A Shelf Corporation is a company that was
created years ago for the sole purpose of
being sold in the future simply for the value of
its age
• A person forms a company and does nothing
with the corporation other than file the annual
reports and cover the annual fees
• Once the corporation is a few years old it has
a sort of value for the right person

25. Origin
• Historically shelf corporations were considered a
legitimate way to streamline a startup
• They were especially useful prior to the
introduction of electronic registration when
setting up new corporations used to take months
to do
• Selling them as vehicles to get around credit
guidelines is fairly new

26. Shelf Corporations
• A shelf corporation doesn't engage in any
real business
• Most shelf corporations have been totally
inactive
• They have never had income, assets or
bank accounts, or had operations or
activity of any kind

27. Shelf Corporation Purposes
• Shelf corporations are legal and do have legitimate
purposes
• In theory, they can be used by someone who may
not otherwise qualify for a bank loan, line of credit,
or government contract because they or their
existing company do not have the required credit
scores or a two to five year established business
history

28. Shelf Corporation Purposes
• For example, a long-established company
might qualify for more credit and funding
• A company that has been open for 10 years will
look more credible than one just opened this
year
• This might help to secure more credit and
funding as the majority of businesses fail within
4 years, and only a small percent make it to 10
years or more

29. Shelf Corporation Purposes
• To gain the opportunity to bid on contracts
• Some jurisdictions require that a company
be in business for a certain length of time
to have this ability

30. Shelf Corporations
Often people purchase such companies in
Nevada, Wyoming or California as well as
Delaware due to regulatory considerations

31. What is Included with Shelf Corps.
• Articles of Incorporation
• “Action of Sole Incorporator” document
which transfers the company to you
• Minutes of meetings (blank sample forms)
• A corporate kit (record book)
• Stock certificates
(blank, un-issued shares)

32. What is Included with Shelf Corps.
• A corporate seal
• Corporate Bylaws (unsigned forms)
• Registered agent service
• Federal Tax ID Number

33. Negatives of Shelf Corporations
• Shelf corporations are not looked upon
favorably by regulators, lenders, or the
business reporting agencies
• Many say they are unethical, borderline
illegal, and some call them a fraud

34. Negatives of Shelf Corporations
• From Dun & Bradstreet…
• “It is unclear whether it is legal to use shelf
corporations to access credit. It is clear,
however, that this is a deceitful, unethical
maneuver that serious entrepreneurs
should avoid.”

35. Negatives of Shelf Corporations
If the credit bureaus learn about the
company being under new management,
they will list it on their reports, effectively
"re-aging" the company

36. Negatives of Shelf Corporations
• "Shell and shelf companies…can be created domestically
or in a foreign country. Shell and shelf companies are
often formed by individuals and businesses to conduct
legitimate transactions
• However, they can be and have been used as vehicles for
common financial crime schemes such as money
laundering, fraudulent loans and fraudulent purchasing
• By virtue of the ease of formation and the
absence of ownership disclosure
requirements, shell and shelf companies
are an attractive vehicle for those seeking
to conduct illicit activity."
• FDIC Special Alert, April 24, 2009

37. Negatives of Shelf Corporations
• Is this practice illegal?
• “Our conclusion was that it is clearly unethical and
possibly illegal. I understand that small business
owners are strapped for cash and unable to get loans,
but they should stay away from these things. If you
can’t get a loan from a bank, you need to look at other
options and maybe even close your doors. It’s a bad
time, but if you can’t secure capital with what your
company has in assets, liabilities, and cash flow, you
shouldn’t try to fool a financial institution.”
Businessweek

38. Negatives of Shelf Corporations
• Many lenders now look at the bank account
start date as the corporation start date
• Most shelf corporations don’t come with
established bank accounts
• Some shelf corporations have actual credit
problems making it harder to get funding, not
easier

39. Negatives of Shelf Corporations
• Most lenders know what to look for to see
if the corporation is a shelf corporation
• Things like your business Bank Rating
could tip them off
• Public records also show the change in
ownership which raises red flags

40. Negatives of Shelf Corporations
• They are expensive
• Some companies might charge $500-6k
• Some companies charge $20k or more
• Cost depends on how long company has
been opened

41. Negatives of Shelf Corporations
• If you purchase the corporation, you are now
the owner and responsible for anything bad
that may have happened with that company
since the day it was incorporated
• This includes back taxes, financial audits,
lawsuits, and judgments

42. Negatives of Shelf Corporations
• They really aren’t needed in business credit
building
• Most vendors WILL approve new businesses
for credit, even if they just opened
• The key is to know which
vendors can help a brand new
business, and which ones can’t

43. Summary
• Shelf corporations are NOT necessary to
build business credit
• Using a shelf corporation is not the best way
to build business credit
• Due to their expense and potential issues,
they can actually hurt you more than they can
help

44. Buying Business Trade lines…
What You Should Know

45. Business Trade Lines
• Business trade lines are lines of credit extended to
businesses by their vendors, by which the business
receives goods or services for which it agrees to pay at a
later date
• Trade lines are often established between a business
and a vendor, as opposed to a line of credit offered by a
bank
• Using trade lines can help businesses build credit since
the loans are frequent and the turnaround quick
• They can also help rapidly build positive credit
experiences

46. Business Trade Lines
• There are many companies online promising to sell
"seasoned" trade lines
• If your company has poor or little credit, you can, for
several hundred or several thousand dollars, have
your business piggybacked onto the account of
someone who has established excellent credit
• This enables new business owners to appear to have
more creditworthiness than they have established for
themselves

47. Business Trade Lines
• "Piggybacking" trade lines is a practice involving
seasoned trade lines, sometimes
called piggybacking, which uses a creditworthy
borrower's accounts to improve the credit of an
unrelated third party
• The creditworthy borrower adds the third party as an
authorized user of his lines of credit, but does not
actually provide the third party with materials (credit
cards, account numbers, etc.) that would permit the
third party to make charges against that account.

48. Business Trade Lines
• The benefit to the third party is an improvement in
their credit rating and showing they have already been
approved for other higher limit revolving accounts
• In theory, showing you already have credit is
supposed to make you more lendable for higher limit
accounts
• Many companies claim to be able to secured
$100,000-250,000 credit lines once these accounts
are reporting

49. How it Works
• A company offering the piggybacking service
maintains a network of creditworthy "card holders" or
"vendors“ those stand by ready to add strangers to
their accounts as authorized users for a fee
• A third party, looking to increase their credit score,
contacts the company
• The company offers a selected trade line to the client
and charges the client a fee per account

50. How it Works
• The client pays the fee (anywhere from $500.00
to $2,000.00 per trade line)
• The company submits the order to the card
holder
• Once the trade line reports, the company pays
the card holder their fee (anywhere from $50.00
to $250.00 per authorized user) and the
company keeps the remaining funds as revenue

51. Business Trade Lines Issues
• While seasoned credit is legal, it can wind up costing
business owners more than obtaining their own credit at
higher interest rates, according to Experian
• D&B and other bureaus frown upon adding seasoned
trades and have a history of shutting down the credit file
of anyone they uncover
• From D&B… “Rather than try and build your business's
credit by piggybacking on a seasoned trade line, it is less
expensive and more effective for your business to work
on building its own credit through proper credit
management and timely growth

52. Learn more about business credit at
www.CreditSuite.com
Ty Crandall
877-600-2487
info@creditsuite.com
Grab Your Free Guide to Building Business Credit
www.CreditSuite.com/ein