How to Ensure Your Child's Credit Isn't Compromised

Children are easy targets for identity thieves. Here’s how to protect your kids’ information.

Children are easy targets for identity thieves. Here’s how to protect your kids’ information
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As kids head back to school, parents should be vigilant about guarding their children's personal information and watching for signs of potential identity theft. A child's credit history is a blank slate, and child identity theft can go undetected for years, making your son or daughter a desirable target of fraudsters.

In fact, a 2011 Carnegie Mellon study found that 10 percent of more than 40,000 children's records studied had someone else using their Social Security number. The impact of child identity theft can take years to undo and can complicate a child's student loan or credit card application, employment status or ability to secure an apartment.

[Read: 6 Tips to Protect Yourself from Identity Theft.]

Thieves steal kids' identities through data breaches, dumpster diving or, in some cases, buying Social Security numbers from someone who has access to the information through their work. Once fraudsters have a child's Social Security number, they might use it to apply for credit or utilities, seek employment (in cases where someone may not be able to legally work in this country) or obtain medical care.

In some cases, the perpetrator is someone the child knows, perhaps even a family member. "A parent may use their child's Social Security number to obtain credit, thinking it's fairly innocuous," says Denis G. Kelly, author of "The Official Identity Theft Prevention Handbook" and president of IDCuffs.com, an identity theft prevention company. However, it's far from innocuous, and the companies defrauded can choose to take legal action against parents who do this.

Foster children have an elevated risk of identity theft because their information might be in files with the county, city, state and foster care system, according to Eva Velasquez, President and CEO of the Identity Theft Resource Center, a nonprofit that assists identity theft victims. "You have kids in the foster care system who don't have a parental advocate," she explains. "Other kids have parents who are watching out for them."

To prevent child identity theft, take the same precautions you use to protect your own identity, both online and on paper. These include only giving out Social Security numbers when absolutely necessary and making sure companies and organizations take adequate steps to protect that information.

[Read: When to Give Out Your Social Security Number, How to Protect It.]

Ask how sensitive information will be protected. School administrators may have a legitimate need for a student's Social Security number, but a Little League coach or scout troop leader probably doesn't. "Parents should ask schools how the schools protect sensitive personal identifying information and how they destroy that personal information," says Ben Souede, an attorney at Angeli Law Group in Portland, Ore. The Family Educational Rights and Privacy Act covers how schools should handle students' information, including giving parents and students the right to inspect a student's educational record and deny permission to share that information to third parties.

Don't carry sensitive documents. Avoid carrying sensitive documents, yours or that of your children, in your wallet unless absolutely necessary. "Kids come with a whole lot of paperwork, and parents may not be as careful with what they do with that paperwork as they are with their own personally identifiable information," Souede says. "When you're going from school to the doctor's office, you might tend to travel with your kid's birth certificate and Social Security card."

Teach your kids online safety precautions. As your kids get older, make sure they take precautions in what they post online or share with others, especially with free online games that require players to input their address, date of birth or other information. "You're not going be around your children 24/7, so teach them safe online protocol," Kelly says. "Understand that they shouldn't be providing any information that they wouldn't tell a stranger. Once it's [online] it's permanent."