Identity theft is becoming a bigger problem in the United States. As technology becomes more sophisticated, hackers are finding more and better ways to steal our identities. And the theft isn’t limited to adults.
In fact, one 2011 study of more than 42,000 minors by Carnegie Mellon's CyLab found that about 10 percent of children are victims of identity theft before they turn 18.
Think about it. Kids are the perfect target for identity thieves. Children’s Social Security numbers come with a blank credit file attached. And it’s not like your 3-year-old is checking his annual credit report, either.
Unfortunately, parents are often unaware of this problem until it’s too late. You might try to get government benefits for your daughter, only to find that someone else is drawing benefits based on her Social Security number. Or your child may get turned down for student loans because of a terrible credit history.
But you don’t just have to stand by wondering if your child’s identity will get stolen before her 18th birthday. Here are steps you can take to protect your child’s credit from fraud, starting today:
1. Know the warning signs.
First, you need to know and look for warning signs that your child’s credit history has already been compromised. These signs include:
- An influx of credit card and loan offers addressed to your child
- Being turned down for Medicaid or other government benefits because the Social Security number has already been used
- An Internal Revenue Service notice that your child didn’t pay income taxes or was claimed as a dependent on another tax return
- Collections calls or bills addressed to your child
- Your child is denied a bank account or driver’s license
The first sign – credit card and loan offers – doesn’t necessarily mean your child’s identity has been stolen. Financial companies have been known to do sillier things than send credit card offers to a minor. But if your child is getting a lot of mail that would typically be for adults, be wary.
2. Check your child’s credit report.
Unfortunately, checking your child’s credit report isn’t as simple as checking your own. You’ll have to mail or fax in documentation proving that you are, indeed, your child’s parent or guardian. This may include copies of the child’s birth certificate and Social Security card, a copy of your own ID and a list of the last few addresses for the child.
Each of the three major credit bureaus – Experian, Equifax and TransUnion – has its own process for checking a minor’s credit report. Check the individual credit union’s website to get more details.
Keep in mind that your child may not even have a credit report. This is a good thing! No credit file means that your child’s Social Security number and other information haven’t been used to get any credit. However, just because Experian, for instance, reports that your child has no credit file, it doesn’t mean that he has no file with Equifax or TransUnion. Not all creditors report to all three bureaus, so many times they’ll have different information. If you do suspect identity theft, check your child’s reports with each of the three bureaus.
How often should you check your child’s credit score? That just depends. You probably don’t want to go through the hassle annually, but you should check your child’s credit as soon as possible if you suspect she’s been a victim of identity theft.
3. To freeze or not to freeze?
You may have heard of something called a credit freeze. Basically, this keeps your credit report from going out to any potential lenders (or even utility companies that may try to pull your file) unless you intentionally “thaw” your credit report first.
Victims of identity theft, or those who are extra worried about it, often freeze their credit reports to not have to deal with further problems. If your file is frozen, a thief can’t take out credit in your name – period.
And you can freeze your child’s credit report – if he or she actually has one. In fact, just having a credit report is a sign that your child has already been a victim of identity theft. This is because you don’t get a credit report until you open a line of credit, and it’s unlikely your 3-year-old applied for a credit card.
In a few states, you can make the credit bureaus create an empty credit file for your child, just so that you can freeze it. But many states don’t have these laws. So if your child doesn’t have a credit report yet, you can’t do anything to freeze it.
You may not want to proactively freeze your child’s file, anyway. Experian says simply ensuring your child doesn’t have a credit report may offer better protection. For example, if someone tries to take out a loan in your child’s name, the lender will be notified that the person has no credit report and the individual is a minor. In this case, the lender can notify the authorities and hopefully catch the potential identity thief.
If Your Child Is a Victim
If your child becomes a victim of identity theft, file a police report, and add a victim statement to his file. As a parent or guardian, the best thing you can do to protect your child’s credit is to simply be aware. Don’t give out your child’s Social Security number – even to family members – and watch for signs of fraud. Consider pulling your child’s credit report every few years, just to be sure nothing is amiss, and report any identity theft immediately.