How to Protect Your Child’s Credit
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As a parent, one of the hardest things to handle — even harder than sleep schedules or potty training — is the daily dose of fear that comes from raising kids. It seems like every day there’s a new headline, study or anecdote that can make you panic. One increasingly common worry is the health of your child’s credit. In 2017, more than a million children were victims of identity fraud, according to a recent study by Javelin Strategy & Research.
The good news is that a little knowledge can go a long way toward protecting your child’s credit score. Let’s look at what you need to know to make sure your child’s credit stays safe until he or she is ready to use it.
Is your child’s credit at risk?
How could your child’s credit be at risk? After all, depending on their age, they can barely spell their name, so it’s not as if they’re submitting credit card applications. And that’s the point. Some identity thieves take a child’s information, including their Social Security number — you were probably asked at the hospital if you wanted one — and use it to apply for credit cards, open bank accounts or apply for government benefits.
How do thieves get your child’s information? That depends. The information could have come from a school form, a doctor’s files, an unsecured electronic communication or even a large data leak. While identity thieves are often anonymous, other times, unscrupulous friends or family members may take your child’s personal information and use it for their own gain. In fact, the Javelin study estimated that family friends accounted for about a third of cases of child identity theft.
How to protect your child from identity theft
If you start receiving credit card applications in your child’s name, or are suddenly getting calls about services your child hasn’t signed up for, or find that your child is denied a government benefit, it’s a sign that your child may be a victim of identity theft. Let’s look at some steps you can take to find out and get things back on track.
Freeze your child’s credit
In 2018, regulations in the Economic Growth, Regulatory Relief and Consumer Protection Act gave parents the opportunity to create a credit file for their minor children so the account can be frozen. The freeze is free. Choosing to freeze your child’s credit until they’re old enough to use it — or when you decide it may make sense to add them as a joint account holder to a family credit card — can give you peace of mind. You can freeze your child’s credit by contacting one of the three credit bureaus — each is required by law to have a web page on credit freezes. Links can also be found at IdentityTheft.gov.
Check your child’s credit report
Just as you regularly check your own credit report, it’s possible to check your child’s credit report, too. Remember: they shouldn’t have a credit report unless they’re listed as a user on a parent or relative’s account. To check a child’s credit report, contact one of the three credit bureaus.
Contact the credit bureaus
Whether you’re concerned about your child’s credit or are considering freezing your child’s credit, it’s smart to reach out to one of the three credit bureaus. Even though all credit cards report to the same bureaus, you may choose to check different bureaus throughout the year to keep tabs on your child’s name and credit. Here’s how they can help:
Experian offers a free Child ID Scan, which searches your child’s Social Security number to see if they have a credit file. If they do have a credit file, a parent or guardian can contact Experian and place a security freeze on the child’s account, as well as file a police report. If accounts are discovered, parents or guardians should contact the business to notify them of the fraud.
TransUnion offers parents and guardians a secure Child Identity Theft Inquiry form. If a file is found, TransUnion will work with the family on next steps, including identifying fraudulent accounts and working to remove them from credit files. TransUnion has a Fraud Victim Assistance Department (FVAD) which can assist in steps required to secure the account.
Equifax will check for a credit file in a child’s name if a parent notifies them by writing. If a credit report is found, Equifax can work with parents to secure and freeze the account. Equifax offers a Minor Freeze Request Form that will freeze your child’s credit until you want to open it.
Protect your child’s information
Whether or not your child has already been a victim of identity theft, there are steps all parents should take to protect their child’s financial information.
Be mindful of sensitive data
As you sign your child up for services, such as public school, you may need to share their Social Security number. If you must share this information, make sure the exchange takes place through an encrypted website or verbally.
It may be smart to keep physical copies of your child’s Social Security card in a safe place that can’t be easily accessed by guests in your home. If you have electronic copies stored in the cloud, it could be a good idea to save that information in a way that can be encrypted and password protected.
Your child’s address can also make them vulnerable to credit theft. The Family Educational Rights and Privacy Act (FERPA) protects a student’s education records and allows families to opt out of being listed in address directories. Being conscious of how your child’s information is disseminated can be a good way to keep tabs on sensitive information.
Finally, it never hurts to ask why a Social Security number is needed on certain forms. Depending on the circumstances, it may be possible to skip giving that information. The more you limit how much information is out there, the less you need to worry about locking it down.
Teach your child to be privacy aware
As your children get older and may be sharing their address, getting checks or even opening their first bank account, it’s smart to let them know that it’s important to be mindful of how they are sharing this information. Giving them age-appropriate lessons on why you keep certain documents locked away, why it’s important to call your credit card company immediately if you think you’ve lost or misplaced your card and why only one person goes into the ATM vestibule at a time are all broad lessons that can help teach kids good privacy habits when they’re old enough to have their own account.
Pay attention to your child’s credit now
When it comes to your child’s credit, not only can some five-minute moves help secure it for the future, but your child will learn from your example about the importance of keeping sensitive information secure. While there are many things to worry about when it comes to kids, the good news is that there’s something parents can do to keep their information safe.