If your child is a minor, he or she really shouldn’t have a credit file. After all, your child isn’t eligible for credit cards, mortgages, or other loans—the kinds of items that would appear on a credit report.
Unfortunately, identity thieves can steal children’s personal information, including their Social Security numbers (SSNs), and use that data to open credit accounts in their names. If an identity thief uses your child’s information to apply for credit, you might not find out about the theft until he or she tries to apply for college loans or other credit. By then, thieves could have racked up years of fraudulent charges, collections, and even bankruptcies or judgments in your child’s name.
When should you check your child’s credit?
I recently checked my daughter’s credit file after I was concerned that her information had been compromised in a data breach. (The incident is still under investigation, but the source of the breach may have been an outside agency hired to do background checks on parent volunteers.) The Federal Trade Commission (FTC) recommends that you check your child’s credit whenever your school experiences a data breach of any kind.
You may also want to check your child’s credit if you begin receiving credit card applications in his or her name. That’s a clue that someone has already applied for credit, pretending to be your child. Credit card issuers don’t typically send credit applications to underage consumers.
Other warning signs
You should also be concerned about identity theft if you get collections calls or bills in your child’s name; if your child is turned down for government benefits and you’re told benefits are already being paid to another account that bears your child’s SSN; or if you receive an IRS notice that your child’s SSN was used on someone else’s tax return.
How to check your child’s credit report
If you’re faced with any of these unsettling situations, you should quickly report the fraud and work to keep the damage from spreading. Your first step: Contact the three national credit reporting agencies (Equifax, TransUnion, and Experian) and ask for a thorough search for a credit file under your child’s name and SSN. While it’s a bit of a hassle—you’ll have to mail in documentation that proves you are the child’s parent or guardian—it’s for his or her protection. You don’t want it to be easy for the wrong person to obtain your child’s credit information.
If any of the credit reporting agencies find a credit file for your child, get a copy of the credit report and review it carefully. If you see accounts that don’t belong to your child, dispute them immediately.
You can also place a fraud alert on your child’s credit file. This requires creditors to verify your child’s identity before granting credit in his or her name. If your state allows it, you may want to go a step further and put a security freeze on your child’s credit file. This will prevent any credit from being opened in his or her name so no further damage can be done.
In addition, you might want to create an Identity Theft Report through the FTC and file a police report with your local law enforcement agency.
Preventing child identity theft
Even if your child hasn’t had a brush with identity theft, it’s wise to be very careful with his or her personal information. Ask your child’s school how it safeguards personal information, such as your child’s SSN. Don’t automatically give your child’s SSN to medical or other service providers. Ask whether insurance information is sufficient or whether you can prove your child’s identity another way. Only carry your child’s Social Security card with you when absolutely necessary, and store the card in a secure place in your home or in a safe deposit box at your bank.
When it comes to kids, it may seem like overkill to worry about identity theft. However, it’s much easier to prevent fraud than to clean up your child’s credit file after a breach has occurred.
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