How to Keep Your Child’s Credit Safe

You probably know how important it is to protect your credit from fraud, but as a parent, you might not realize that your child’s credit is up for grabs by identity thieves, too.

Javelin Strategy & Research estimated that more than 1 million children were the victim of identity fraud in 2017, which resulted in total losses of $2.6 billion.

Children who are targeted by identity thieves often deal with serious consequences once they’re adults. A recent survey of childhood identity theft victims by Experian found that for most children, it takes about three years to recover from identity theft.

Further, the survey found that the average age of victims was just 12 years old. But many didn’t realize identity theft occurred until they were 18 or older, right about the time most young adults apply for jobs and credit for the first time if they haven’t already. One in four survey respondents are still dealing with the aftermath more than 10 years later.

Easy Targets of Identity Theft

“Children have become a prime target of identity thieves,” says Steve Weisman, a lawyer, professor and expert in identity theft who writes the blog Weisman says if identity thieves are able to get identifying information on a child, such as a Social Security number, they may be able to obtain credit in the child’s name.

“The identity thief never pays back the money accessed through the child’s credit and the child is burdened with a bad credit report,” says Weisman. Harmful consequences can arise when the affected child eventually applies for credit, a job, a scholarship or an apartment. “Often, the identity theft is not discovered until years after it first happens, which makes it more difficult to remedy.”

How do thieves get their hands on this information in the first place?

[Read: Best Student Credit Cards of 2018.]

According to the FTC, children’s sensitive personal information may be shared through their schools through forms and emails, which could be mishandled or accessed through a data breach, for example. Your child’s school directory might include personal information such as your child’s name, address, birthday, phone number, email address and photo, which can be valuable to identity thieves.

It’s also possible for your child’s information to be compromised through programs affiliated with the school, such as after-school sports and music programs. Your child’s personal information might exchange several hands, and sometimes, these non-school-related programs have websites that display participants’ names and photos, which makes it easier for thieves to track down the information they need.

Also, don’t discount the risk you might present without realizing it. For instance, do you or other guardians carry your child’s Social Security card in your wallet, or toss documents containing sensitive information in the trash without shredding them first? Taking the proper measures to keep your child’s paper and electronic records secure will go a long way in protecting their credit.

Unfortunately, in some cases, it’s close family members who fraudulently open accounts in a child’s name. In this case, all you can do is take every preventative measure possible and keep a close eye on your child’s credit activity.

Preventing Childhood Identity Theft

It’s important to know your child’s rights under the law and how to keep their personal information secure to prevent identity theft.

Know the warning signs. One of the biggest signs of identity theft is if your child starts receiving credit card or loan offers in the mail, according to Kevin Gallegos, senior vice president of new client enrollment and Phoenix operations with Freedom Financial, a debt settlement company. Receiving collection calls, notices from the IRS about unpaid taxes or denial of government benefits are also some telltale signs. Keep an eye out for any suspicious communication aimed at your child.

Never share your child’s Social Security number. A Social Security number is the key to unlocking credit in many cases, so you don’t want it to fall into the wrong hands. “If you are asked for a Social Security number for identification purposes, whether at school, a doctor’s office or other, ask if you can use only the last four digits or see if you can identify the child in some other way,” says Gallegos.

[Read: Best Credit Cards for Bad Credit of 2018.]

Hold your child’s school accountable. Since school can be a minefield of identity theft risks, it’s important to follow up with administrators to ensure your child’s credit isn’t compromised. Under the Family Educational Rights and Privacy Act, or FERPA, it’s your child’s right to have the privacy of their student education records protected. It also gives you the right to opt out of sharing directory information with third parties.

The FTC recommends starting by finding out who has access to your child’s information and making sure it’s kept in a secure location. You might want to opt out of being included in the school directory as well. To do this, it’s best to put your request in writing and keep a copy for your own records.

Additionally, be wary of any school forms you receive through the mail or online that request personally identifying information for your child. Find out how the information will be used and who it will be shared with. If you’re not comfortable providing that information, again, opt out. If your rights under FERPA are violated, you should file a complaint with the U.S. Department of Education via the Family Policy Compliance Office.

Be especially cautious with foster children. If you are the parent of a child who has been in the foster system, be especially vigilant. “They can be at greater risk of identity theft, as their information passes through many hands,” says Gallegos.

In 2011, Congress passed a law requiring child welfare agencies to help foster kids check and repair their credit when they turn 16. However, if your child is younger, there’s a good chance their credit hasn’t been monitored in any way.

Regularly review credit reports. Not all minors have credit reports. In fact, the three major credit reporting agencies — Experian, Equifax and TransUnion — don’t knowingly keep data on children younger than 13. The process for requesting a minor’s credit report varies by agency:

Experian: To find out if Experian has a credit report for your child, you’ll need to fill out this form and mail or email it to Experian. If there is a credit report on file, Experian will place a freeze on your child’s credit and add a security alert to the file.

Equifax: To request credit information on your child through Equifax, you’ll need to contact their Minor Child Department in writing. Additionally, you must include copies of your child’s birth certificate and Social Security card, a copy of your government identification, such as a driver’s license and proof that you’re the legal guardian if you’re not the parent. Equifax will then let you know if a credit file exists.

TransUnion: TransUnion provides a Child Identity Theft Inquiry form that you can complete and submit online. If TransUnion finds a credit file, they’ll investigate the issue further.

Older children who already have a credit file usually have one because their parents added them as an authorized user on a credit card account, made them a joint bank account holder or put a small bill in their name, such as a cell phone bill.

“When reports do exist, parents or guardians and teens should review the reports together to make sure they contain accurate information,” says Gallegos.

[Read: The Best Starter Cards for Building Your Credit.]

Adults and minors 14 and older can request a free credit report from all three credit bureaus once per year from or by calling 877-322-8228. Since you can only access credit reports once per year at no cost, you might want to pull one report every few months rather than all three at once to ensure continuous monitoring.

“If there are any errors, follow the directions for correction on each credit reporting agency’s website,” says Gallegos. If you suspect fraud, it’s important to alert the appropriate authorities as soon as possible.

“If no reports exist, the child’s credit has never been used — a good indicator that there are no problems,” says Gallegos. However, if a report does exist and you don’t believe there’s any reason for it, check for nefarious activity.

Consider a credit freeze. Finally, consider instituting a freeze on your child’s credit with the three main credit reporting agencies. This “shuts access to an existing credit file, making it impossible for anyone to open a credit card or loan using a Social Security number,” says Gallegos. Previously, this was only available in some states and required a fee. However, thanks to a new law, you will have the ability to place freezes on your own credit, as well as minors younger than 16, at no cost no matter where you live. You also won’t have to pay to thaw your credit. This law will be in effect as of late September 2018.

If you find out your child’s credit has been compromised, it’s important to take action right away. Contact each of the credit bureaus to report the fraud, and ask at least one to place a fraud alert on the account. Each bureau will notify the others. You should also file a police report and submit a complaint to the Consumer Financial Protection Bureau. Consider filing a fraud report with the Federal Trade Commission as well.

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