The fact is that having bad credit can create serious issues
in your life. Because of this, most
people who find themselves in this situation are searching for a way to improve
their credit as quickly as they possibly can.
There are many unscrupulous companies that respond to this need by offering quick fix solutions for bad credit. The truth is that there is no legal way to repair your credit quickly. If you find yourself in the situation of saying "I wish I knew how to fix my bad credit", you should understand that it is going to take months and perhaps years, depending on your situation.
You might have heard that you could get a "new credit identity" that will wipe away things as serious as a bankruptcy or foreclosure. The strategy being advertised is called file segregation and although it will give you a new credit file it is also very much against the law.
The idea is that you will request and EIN, or Employer's Identification Number, from the IRS under false pretenses. You will then use this EIN as if it where your Social Security Number when you make loan applications. Because both numbers are nine digits and there will be no record under the new EIN number you will create a new credit file with your application. Very often, the companies that sell this strategy will also advise you do use a new address when getting the EIN and making loan applications.
Using this strategy will make you vulnerable to prosecution for criminal activity and may also cause you to face stiff penalties from the IRS. It is against the law to request an EIN for purposes other than a legitimate business. It is also considered bank fraud when you submit a loan application and put an EIN in place of your Social Security Number. If your loan applications are submitted via mail or electronically, you are also guilty of wire fraud.
Chances are you will face the consequences for these actions alone. Most of the time, the scammers are very careful to have you do all the work. You will be the one to request the EIN as well as the one to use it on your loan applications. You will also be the one to submit the applications. This means that when it is time to pay the price, you alone will suffer.
A far better plan is to work to clean bad credit through legitimate means.