Legal Question in Credit and Debt Law in California

Secondary Credit Number

I was told that a secondary credit number is a legal way to start a new credit history through the credit bureaus while still being held accountable for past credit history using your ssn. Is this true? Seems like it might not be completely legal but I'm not a professional.

Asked on 10/09/08, 4:37 pm

2 Answers from Attorneys

David Gibbs The Gibbs Law Firm, APC
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Re: Secondary Credit Number

Not legal.

*Due to the limitations of the LawGuru Forums, The Gibbs Law Firm, APC's (the "Firm") participation in responding to questions posted herein does not constitute legal advice, nor legal representation of the person or entity posting a question. No Attorney/Client relationship is or shall be construed to be created hereby. The information provided is general and requires that the poster obtain specific legal advice from an attorney. The poster shall not rely upon the information provided herein as legal advice nor as the basis for making any decisions of legal consequence.

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10/09/08, 5:08 pm
Robert Mccoy Law Office Of Robert McCoy
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Re: Secondary Credit Number

The reason the law allows people to form corporations or other entities under a tax ID number different from their social security number is to segregate liability which will result in segregating credit. So it is very possible for a person with good credit to be the sole share-owner of a corporation with bad credit, or for a corporation with good credit to be completely owned by a person with bad credit. This practice is quite legal, even authorized by law.

However, most lending institions are savvy to this and will usually ask someone seeking a loan to specify whether they are the majority shareholders in any corporations or owners in any other entities. If the corporation is seeking a loan, lenders will often require a credit check of the majority shareholder's shares. A similar situation arises with trusts and partnerships.

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10/09/08, 6:06 pm

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