In all the little details of parenting, one thing you may not have had to ask is how do I check my child’s credit report? After all, why would you? They’ve never used a credit card before, right?
That may be true. But that doesn’t mean someone else hasn’t used your child’s credit.
You may think your child’s personal information — such as their Social Security number — is completely safe. But that might not actually be the case. Think about all the schools, doctors, and other organizations that ask for that information. Usually, these places keep your child’s information secure, but the worst can happen to even the safest organization.
And then there are potential issues for family members and close friends to use your child’s identity to open credit accounts. This is becoming more and more common. In fact, in 2012, one in 40 surveyed families with children under the age of 18 had at least one child with compromised personal information!
I don’t write all of this to scare you, but to help you watch for the warning signs of identity theft and to know how to deal with it.
The Problem of Child Identity Theft
We don’t often connect our kids and their credit in our heads. But the fact is that fraudulent activity can happen to anyone with a Social Security number. Thieves often create identities using a child’s authentic Social Security number paired with a different date of birth. This means that they can often get away with their crimes.
Identity theft may not immediately impact your child. After all, your five-year-old won’t be applying for a mortgage or even a student loan any time soon.
The problem is that because we don’t think much about our children’s credit files, this type of activity can go undetected for years. You may not know your child’s ID has been compromised until he applies for that first mortgage or car loan, only to be denied because he has bad credit.
That’s the bad news. The good news is that you can look for warning signs and prevent this type of fraudulent activity. Here’s how:
Warning Signs to Look For
As I already noted, this type of crime often goes undetected for a year or more because parents don’t have occasion to check their children’s credit reports. But here are some warning signs the FTC says you should look for:
- Your child is turned down for government benefits because his or her Social Security number is already receiving those benefits.
- You get an IRS notice saying your child didn’t pay income taxes or that your child’s Social Security number was used on another return.
- You get collections calls or bills for a product or service you never used.
These are the reasons the FTC lists, but if you have another reason to think your child’s ID has been compromised, you might also take the following steps. This might include a family member explicitly asking for your child’s identity information in a way that makes you suspicious. Or it could include receiving notice from your insurance company, doctor’s office, or other entity that identities they have on file may have been compromised.
What to Do First
Check to see if your child has a credit report. If your child’s ID has been used to open accounts fraudulently, they’ll have a credit report. If they don’t have a credit report, then you’re likely in the clear.
Unfortunately, most online credit report options require a driver’s license or some sort of state ID number to access your information. Since your child isn’t likely to have one of these, you won’t be able to access their information online.
Instead, you’ll have to manually contact each of the three credit reporting bureaus with your child’s Social Security card and birth certificate, as well as your government-issued ID and proof of address. You’ll have to submit the forms so that the credit reporting bureau can pull your child’s credit report — if one exists — manually.
(Click on the links to find the form for checking your child’s credit report with TransUnion and Experian. Equifax does not seem to offer this form online, but offers information about the process here.)
If your child doesn’t have a credit report with any of the three reporting bureaus, that’s a good thing! That means your child probably hasn’t been the victim of identity theft.
There are some accounts that people could open fraudulently in your child’s name that wouldn’t be reported to their credit — such as cell phone or cable services — but these are less likely. Keep an eye out for those aforementioned bills and collections calls, though, just in case.
So, what if your child does have a credit report open showing fraudulent activity? Contact your local police department to file a report. Then contact the credit bureau showing this activity. They can flag your child’s credit report so that additional accounts cannot be opened.
How to Freeze Your Child’s Credit
Freezing a credit report simply makes it harder to take out credit on that report. It doesn’t make it impossible, but it does throw up a block for potential thieves.
Opinions differ on whether or not you should freeze your child’s credit report. This article from Experian suggests avoiding this, if possible. If your child has already been the victim of identity theft, you can protect your child’s identity without actually placing a freeze–which often costs money and isn’t allowed in all states.
Because of the complications, this article suggests only placing a freeze if your very young child is already a victim of identity theft.
Equifax, on the other hand, suggests placing a freeze if your child already has an open credit report. The article correctly points out that a freeze isn’t likely to affect anyone but a potential thief, since your child won’t actually need credit for a while.
This decision is really up to you. If you do find that your young child has a credit report open, you may decide to freeze the report. Look into your state’s laws and the costs of doing so when making your decision.
What About Repairing the Credit?
If your child’s credit has already been abused, you may need to spend time cleaning up the problems. First, you’ll need to place a fraud alert on your child’s credit report. Then, you’ll need to file a report with the FTC and your local police department.
Next, you’ll need to contact businesses where accounts were opened in your child’s name. These businesses should work with you to remedy the accounts and remove them from your child’s credit report.
It’s important to make sure you work through these steps sooner rather than later. While you’re at it, be sure to record any phone calls that you have, and to send information in writing as well. Keep copies of the letters and the dates that you made calls or sent letters. That way you can reference what you’ve done so far if you have trouble getting businesses to close these accounts.
Should You Pay for Credit Monitoring?
Most credit monitoring services focus on monitoring adults’ credits. However, some services offer protection for everyone in the household. If you’re truly concerned about ongoing problems with identity theft, these services may appeal to you.
Just make sure that you vet these services thoroughly before spending money on them. Look into what level of monitoring the services offer, and what services they offer customers who have been victims of identity theft.
Preventing Identity Theft in the First Place
Ideally you’ll never have to go through all of these steps to protect and clean up your child’s credit report. Because ideally no one will misuse your child’s identity. But here’s how you can prevent these issues in the first place:
- Be aware of who has your child’s identity information. Any time you write down your child’s Social Security number for a form, keep track of who has that form. Make sure that the form is secure. Write down who has that information so that you can be on notice if that entity has a breach.
- Pay attention before giving out this information. Sometimes forms from school or other entities will ask for this type of information. But the information may not be strictly necessary. Try to avoid writing down this information whenever possible.
- Open a 529 account. Sometimes family members will ask for your child’s Social Security number to open a savings account in your child’s name in your child’s name. Avoid this issue by opening a 529 account. Most online account management options let you send a link so that others can contribute to the account without using your child’s personal information.
- Reconsider adding your child as an authorized user. Adding your child as an authorized user to your credit card account seems like an easy way to give them access to funds in an emergency. But this action will open up a credit report for your child, opening them up to identity theft. Consider using a prepaid debit card as another option.
- Teach your kids about these issues. Finally, as your kids grow, talk to them about the importance of keeping their private information private. Consider keeping your child’s Social Security card where even they don’t have access, so that they can’t accidentally slip this information. And teach them the importance of protecting things like passwords to their online accounts early on.
Be sure to combine these steps with basic awareness of the warning signs of child identity theft. In doing so, you can avoid — or quickly remedy, if need be — this growing problem.
Have you (when you were younger) or your child fallen victim to identity theft? How did it affect you and how difficult was it to correct?