Your kids have a lot on their minds: school, friends, sports. Identity theft and protecting credit reports shouldn’t be among their concerns – or yours, for that matter. After all, kids under age 18 cannot legally obligate themselves to contracts.
In a perfect world, you would never need to worry about someone stealing your child's personal information and using it to commit fraud. The bad news is, we do not live in a perfect world. Identity theft can absolutely happen to a minor. A recent study released by Javelin Strategy & Research indicates that more than one million children were victims of fraud in 2017 alone.
The good news is that you can and should take steps to protect your child from identity theft. First and foremost, the easy stuff: Be careful who you share your child's personal information with. Not allowing your kids to post their birth dates on social media is another one. And finally, you might consider freezing your children’s three credit reports if you want to be extra vigilant.
You might be wondering, “How in the world can I freeze my children’s credit reports if they don’t have credit reports?” That’s a great questions, which I’ll address in a bit. Safe to say, you have options.
How Will I Know If My Child Has Already Been a Victim?
It's important to recognize the red flags that might indicate your child's personal information has already been stolen and used fraudulently. Here are some of the more common warning signs, which apply to adults as well.
- Pre-approved credit card offers in your child’s name show up in the mail.
- Collection agencies or creditors attempt to contact your child via phone or mail.
- The IRS sends a notice that your child's Social Security Number has been used on another tax return, or that your child hasn’t paid his or her income taxes.
- Packages, addressed to your child, show up at your door.
- Mail from government agencies, addressed to your child, shows up in the mail.
Credit Reports and Credit Freezes
Thanks to a recent amendment to the Fair Credit Reporting Act (FCRA), it is easy for parents to freeze their minor children's credit reports. The FCRA now gives parents who live anywhere in the United States the right to have the credit reporting agencies create credit reports for their children, and then freeze the reports free of charge.
Creating a credit report for your child prevents it from being created by a fraudster who applies for credit in your child’s name.
Creating a credit report for your child prevents it from being created by a fraudster who applies for credit in your child’s name. Your credit reports are created the first time you apply for credit, so if a fraudster applies for credit in your child’s name, and it is the first application ever submitted in your child’s name, a credit report to be created, unless one already exists in the credit bureau’s systems. That’s the point of having the credit bureaus do it proactively.
Freezing your child's credit reports will prevent fraudsters from opening accounts in your child's name, even if they manage to get their hands on sensitive, personal information. Credit freezes take your child's credit reports out of circulation. As a result, lenders will turn down any fraudulent applications for financing because they will be unable to access your child's credit information. Here are links where you can request a free credit freeze for your minor child:
You will have to create a credit report with each of the three credit reporting agencies. You will also have to reach out to each agency to freeze those reports. There is no “one and done” option for credit freezes, at least not yet. Children can "thaw" their reports when they become old enough to apply for and open credit accounts on their own. In the meantime, the reports are locked down tight and protected from the bad guys.