EIN and Credit

It’s a tough time for everyone. Homes are going into foreclosure. Individuals are losing their jobs. And the scam artists are coming out of the woodwork to capitalize on damaged credit and the EIN.

It seems that everywhere there are people down on their luck, there are scam artists around to exploit them. I don’t know what scam artists get out of taking advantage of people who are already in distress. But, you have to learn how to protect yourself from even the savviest people who make you think they are on your side.

Have you ever been approached by a company who told you that they would clean your credit history in as little as fifteen days? It sounds too good to be true and you know what they say. It is too good to be true.

The process they promise is to issue you an Employer Identification Number, then give you unlimited positive information on a new credit file that is identified by your new EIN. The first line item to debunk this method is the fact that credit bureaus and credit agencies CAN tell the difference between your newly issued EIN and the Social Security Number you’ve had all your life.

At the irs.gov website, you can apply online for your own EIN. You have to do it in one session so you should have all the information available with you when you start the process. You get your EIN immediately once you finish the application and if you have Adobe Reader, as everyone does I’m pretty sure, you would also be able to get your confirmation letter immediately. You can print it out and use it for verification purposes.

An EIN is used to identify a business entity. An individual can be a business entity and you don’t necessarily have to have an employee. So, the process of obtaining an EIN online is almost as easy as finding porn. But, it won’t help you start a new credit file because it is easily distinguishable from a social security number.

First of all, a social security number is in the format of 000-00-0000. The EIN is in the format of 20-0000000. The “20” at the beginning of the EIN might be a “26” or a “27” and indicates that your EIN was assigned online. You can fit those numbers into an online credit application or a hard copy wherever you are applying for credit. But, they will come up as invalid and it’s not even worth your time to go through all that hassle.

So, what the scam artist is giving you is a number that you can obtain yourself in a matter of minutes. Then, they promise to put unlimited positive information on your credit file. At this point, I can go no further in the application process to find out first hand. They would need the money first and I’m not willing to justify their existence to write an article about something I just may have already figured out on my own. Credit my experience. I’ve seen this plenty of times in one form or another over the years.

In taking my best guess as to how they proceed to place unlimited positive information on your credit file that now falls under your EIN, I would say that they send you a package that tells you what programs will give you instant positive feedback. These programs are your typical secured credit lines and lines of credit that require you to purchase merchandise from a catalog. It’s unlimited because it’s up to you how many programs in which you wish to participate. With language built into the scam to the nature of, “The more positive information on your credit file, the more money banks will lend you,” you feel urged to participate in all the programs they offer. They go even further as to remind you that you have established new credit and that you shouldn’t tarnish it by building up delinquent accounts.

By the way, I would just about be willing to bet that these programs will identify your new EIN and congratulate you on finally getting your credit started. Just another action they take to seal the deal. You are sold into the program. You are not backing out now because you are getting offers you never could get under your social security number. And you are motivated to make payments on time because it’s a new chance to get anything you’ve always wanted. Life is good.

That is until you find out how in debt you are all over again. These programs are ridiculously high in APR and some are just plain ridiculous period. Like the unsecured credit card you can get with a $200 credit line. As soon as you activate it, they take $150 for an application fee and you are left with $50 in credit. Then, you pay interest on the $150 and your bills start stacking up on money you didn’t even get to enjoy spending.

As far as an EIN is concerned, there is an IRS Taxpayer Identification Number matching program with language on the irs.gov site that indicates your EIN will be able to pass the number matching program within two weeks. Once that is done, you can use it to open a bank account under your EIN. This is not a loophole, but I would be willing to say that a well-kept bank account would qualify for a loan if you have moved forward and obtained a DUNS number as well. Positive information from this legitimate bank loan could create an opening for you to extend your credit in a business capacity.

Since you are only required to use your Social Security Number in communications with the government and your employer, it just may be possible to start over on a line of credit. But, a fine line exists between your credit record and your business’s credit record. You’ll have to do your research, know your limits, and this time act responsibly. Then, you might be able to keep your adverse credit history from holding you back for the rest of your life. You’ll be able to obtain credit for your business as long as you keep your payments up to date.

Caution: Credit extended to businesses is normally higher than credit extended to individuals. It is tempting to accept the credit. But then, you’ll soon find yourself way over your head in debt all over again. Be fair to yourself and only make sound financial decisions.