Most parents don’t think about their child’s credit file while their child is young. Parent’s days are filled with ensuring their child’s physical safety and providing emotional support. But with today’s economy making people more desperate and bold, along with the current laws regulating credit, more and more children are becoming victims of identity theft.
According to a study done in 2018 by Javelin Strategy and Research, approximately 1 million children were victims of id theft or social security number abuse and 66% of them were under the age of 8! Another key finding, in households that had been notified that someone’s information had been breached, 39% of the cases involved children. Criminals can buy a child’s social security number on the dark web for about $2 and have a field day, because when that credit report is pulled, there’s no negative information. Once they have a child’s social they can then set up a “synthetic identity” which is one that they can add a different date of birth, name, etc. and start building credit under that identity. Then, years later, when that child is applying to college, a job, or for their first car is usually when the id fraud is discovered. It takes a copious amount of time and paperwork to unravel this nightmare. Many times it is someone in the family or close to the family that has access to the child’s information that ends up being the ID thief.
Since many companies aren’t required to cross-check a creditor’s name, birthdate and social security number, it leaves the door open for anyone to fraudulently open credit cards, loans and other types of credit in a child’s name. It is up to parents or the child’s guardians to check the child’s credit file on www.annualcreditreport.com just like they check their own.
Here are some simple steps to follow to protect your child’s credit as well as your own:
1. Each year run a credit search on each of the bureaus (TransUnion, Equifax, Experian). Best time to run the report is January after the holidays and thieves have been busiest.
2. Watch for any credit offers in your child’s name that come in the mail. This is usually indicative that there may be existing credit somewhere and should be a red flag.
3. Teach your children that they are NEVER to share information such as birthdates, addresses and social security numbers with anyone outside the family or without your permission.
4. Monitor who they interact with via text, social networks and emails. Anyone asking for DOB, birth place, or social security number should be closely scrutinized and questioned.
5. If you should find that someone has fraudulently opened credit in your child’s name, file a fraud alert and request a credit freeze immediately with each credit agency. Next, it’s very important that you call your local police department and file a report. A copy of the report file number should be forwarded to each credit bureau.
6. After the credit company and the police have completed their investigation, they may be able to bring criminal charges and prosecute the person who stole your child’s identity. Be sure to ask the court and law enforcement for a certificate of clearance. Follow up and ensure that it is included in each agency’s files on your child and include a written statement.
Child safety involves more than just a child’s physical safety from child predators and bullies. In today’s technological age, parents have to also be vigilant to the cyber threats a child may face when interacting online. With just a little misplaced or bought information, a criminal can wreak havoc on your child’s future credit before they reach adulthood. So teach your child now how to protect their own future, by teaching them the importance of “information discretion”, or as we refer to it in the military as a “need to know basis”!
In the next post, we’ll discuss how you can freeze your child’s credit report.