Is File Segregation the Answer for Your Credit?

You have probably seen flashy ads on the internet and in print promising that for a small fee you can legally obtain a brand new credit file.  The method of credit repair that people are advertising is called file segregation.  If you would like to learn more about it then you will want to read on.  We will be discussing what file segregation involved and explore whether it is the magic solution to credit restoration.

What does file segregation involve?

File segregation involves obtaining an EIN (Employer Identification Number) and starting a new credit file with this number.  You will typically be asked to use an address other than your own so that your new credit file and your old one do not become merged.

Is it the solution for credit repair?

If is sounds to good to be true, it usually is!  Unfortunately, there is no short cut to credit report repair. Employer Identification Numbers are legally obtained for the purposes of starting a legitimate business.  Obtaining a number for the purposes of credit repair is considered fraud.  The scheme requires that once you illegally obtain an EIN, that you then present this number as your social security number on credit applications.  This is bank fraud.  Take this a step further and if you submit any of these applications via mail, you can also be guilty of federal mail fraud.

The risk just is not worth it!

How do companies get away with this?

Well, obviously, legitimate and reputable companies don’t do this.  Those that advertise this service are typically fly by night companies that are layered in so many levels of legal protection that it would be difficult for most anyone to determine who actually owns the company.  Their goal is to collect an upfront fee from as many people as they can and move on.  They make a very big deal that their services are completely legal.  Typically, they have you do all the dirty work so that if you are found out, the only one on the hook for anything is you.