New Credit File - The Dark Side Of Credit Repair

Bad credit rating drives some to the extremes. Starting a new credit file is one of these extreme measures. A new credit file will not contain any of the previous credit information on it, neither the bad nor the good and certainly not the ugly.

The main reason this is even possible is the information overload. Think about it. Every day in US thousands of children are born and thousand will leave their physical shell for greener pastures in the heavens. These birth and death rates create new additions and new permanent removal of information from credit bureau's computer system.

Remember that credit bureau's already track financial and credit history of millions of Americans.

What will happen when the information about people with the same names and birth dates sometimes even in the same city enter the system?

A flaw and a loophole are created.

Well, the credit bureau's computer system is not infallible and with increased and conflicting legislation to protect citizens rights to privacy and restrictions placed on sharing of information between agencies, some have found the loophole and use it to create a new credit file for themselves.

There are three major ways that people create a new credit file. One is to use their same name with different personal information. Another is to use the same personal information with a different first or last name. And last of all, they use an alias name with the same or different personal information.

Personal information means a person's birth date, social security number, address etc.

These new credit files seem legitimate and from credit bureau's computer system point of view they fall under those anomalies we mentioned earlier such as two people can have the same name and birth date but live in two different locations.

Many of the techniques used to obtain a new credit file are taken from legitimate day to day living needs. For example, those who decide to change their names for personal or religious reasons; they can obtain a new social security number. Or when some one moves from one state to another, they need to get a new driver's license.

However when one changes his or her name in order to get a new social security number to skip on the credit card payments, he or she is crossing the legal lines.

Or if someone creates a false social security number under the Federal Trade Commission's Credit Repair Act, that someone may be committing a felony by using a false identification number.

The rules are too many, the potential penalties too high. Do your homework and understand the laws so that you do not break them unknowingly.

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