Why You Should Check Your Child’s Credit History

Why You Should Check Your Child’s Credit History

There are endless things parents do to help keep their children safe. They take them for their annual physicals. Hold their hand when they cross the street. Teach them how to protect themselves from bullies. One other thing you can do to safeguard your child is to pay attention to his or her credit history.

Sounds a little crazy, right? After all, kids don’t even have credit histories. The reason parents need to check their child’s credit history is because minors are increasingly becoming victims of identity fraud. According to a recent article in The Wall Street Journal, criminals are stealing children’s Social Security numbers and using those numbers to create false identities in which they use to take out loans, open credit cards, and utility accounts, and even apply for government benefits.
The numbers are alarming: A Javelin research study found that more than one million children were victims of identity fraud in 2017, resulting in total losses of $2.6 billion and over $540 million in out-of-pocket costs to families. Often, the victims won’t realize they have been targeted until they are 17 or 18 and try to open their first credit card, get a driver’s license, apply for a loan or rent an apartment. Resolving these issues can take years and the damage to the victim’s credit report can linger.
Why kids?
From a criminal’s point of view, children are optimal targets. They haven’t taken out a credit card or a loan so they have an untarnished credit history. Plus, most parents don’t check their children’s credit history, so the identity theft can go unnoticed for a long time.
So what’s a parent to do?
Here are several steps you can take to monitor your children’s credit history as well as protect them from being a victim.

  • Visit one of the three credit bureaus, Experian, TransUnion or Equifax, and find out if your child has a credit report. In most cases, they should not. Follow the instructions that are specific to looking up the credit information of a minor.

The Federal Trade Commission recommends checking your child’s credit file around his or her 16th birthday. This will give you some time to correct any errors before your child turns 18.  Of course, if there are signs that your child’s credit or identity has been compromised, such as if they are receiving collection calls or your child was denied a bank account, you will want to check as soon as possible.

  • If you believe your child is a victim, visit the Federal Trade Commission’s website IdentityTheft.gov. This website has a complete list of actions you should take. Inquiries are free of charge and so is freezing the credit file if fraud is found.
  • Avoid sharing your child’s Social Security number whenever possible. If someone asks you for it, inquire about why they need it and how they will use that information. Offer to provide an alternative identifier.
  • Shred any documents that have your child’s Social Security number or other sensitive information prior to discarding them.
  • Don’t put your child’s information at risk. Make sure any paper documents or electronic records that contain your child’s personal information are in a safe location and/or protected with strong passwords.
  • Teach older children to keep personal information, such as Social Security numbers, private. Tell them about the dangers of sharing this type of information both offline and online.

Identity theft is a serious crime with long-term implications for its victims. By keeping an eye out for signs of fraud and checking your child’s credit report, hopefully you will be able to identify and resolve any problems quickly.
This article is for informational purposes only and not for the purpose of providing legal or financial advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.

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