Are you as protective of your kids as I am of mine? That is our responsibility, our purpose and our joy. But how often do you check their credit report? “Their WHAT?!,” you ask. “There are so many years to go before we need to worry about that. Right?”
Unfortunately, no. Because children have untouched and unblemished credit records, they are highly attractive targets. Child identity theft is profitable, hard to detect, and a nightmare to recover. Thieves steal a child’s identity early on, nurture it until they have a solid credit score, and then abuse and discard it.
How Does It Happen? All an identity thief needs to ruin your child’s bright financial future is her name and Social Security Number. All too often, background checks involve simply matching the name and the Social Security Number provided. This leaves doors wide open for scandalous minds to wreak havoc on your child’s perfect credit. The most unsettling part is that the age of the applicant (in this case, the person posing as your child) becomes official with the credit bureaus upon the first credit application.
The FTC states that 5% of identity theft cases target children, and that is probably an understatement. To make matters more complicated, the identity thief is not always a stranger. In many cases, it’s a relative with bad credit who takes advantage of a child’s pristine credit. In the same way that you can’t protect your children from every bruise and scrape, you can’t entirely remove the risk of identity theft. You can, however, prevent or soften the fall if it does happen. Take these steps first:
- Stop giving out your child’s personal information. Until you are confident that it is absolutely necessary to receive the services desired, withhold their personal information. More than 80% of organizations that ask for your child’s Social Security Number don’t actually need it to establish services.
- Order a free credit report for your child at least once a year. All three major credit reporting bureaus (Equifax, Experian and TransUnion) offer one free credit report per year per individual. Order one for your child at the same time you order yours and review them both for any red flags indicating fraudulent activity. If the bureau says that there is no credit report for your child, then you have nothing to worry about.
- If you find evidence of fraudulent activity, contact the police, the source of the fraud and all three credit bureaus. Filing a police report helps to establish your child’s innocence in an official way. Have the credit bureaus FREEZE your child’s credit for maximum protection.
- Educate your children on the importance of protecting their personal information. Teach them about the value of their personal information: their name, address, phone numbers, email address, Social Security Number and any passwords and PIN numbers. Reinforce that they own their private information and that it should not be shared with friends, over the internet or with anyone whom they don’t know or trust.
In the case of child identity theft, an ounce of prevention is worth a lifetime of financial security. Don’t let the center of your universe become just another statistic.