Most parents will take difficult measures to protect their children. But many people overlook a relatively simple way to help support their children’s financial security: freeze the minor’s credit.
This may be especially important in the wake of a major breach in which the Social Security numbers of countless Americans were potentially sold on the dark web. While locking down their credit won’t solve all of the cybersecurity concerns associated with stolen Social Security numbers, it’s an extra layer of protection parents can implement.
The credit lock process involves contacting the three major credit bureaus – Experian, Equifax and TransUnion – and providing required documentation, including the child’s birth certificate, Social Security card, proof of address and proof of parenthood. The bureau then creates a credit report for the child and locks it so it cannot use the child’s personal information to issue loans or credit cards. The freeze will remain in effect until the parent (or, in some cases, the child) requests a temporary or permanent lift.
Parents can proactively take these steps even if there are no signs of damage to the minor’s credit, such as unexpected credit card solicitations or bills received in the minor’s name.
Locking in your child’s credit may take some time and effort, but the cost is minimal compared to the lengthy and emotional credit recovery process. “As an adult, we would be angry if our credit was stolen, but we would do what needs to be done and move on,” said Kim Cole, community engagement manager at Navicore Solutions, a nonprofit credit and housing counseling agency. Cole said. But for children, the emotional impact is much greater, she said. “It could take years for the problem to be heard, and in the meantime, the damage could continue to mount.”
Loretta Roney, president and CEO of InCharge, said identity theft against children, especially younger ones, often goes unnoticed until they become older teens or young adults applying for their first credit card, trying to pay for a car financing or seeking student loans.
However, identity theft among children under 19 is a growing problem, with this group accounting for 3% of all identity theft reports in the first half of 2024 Federal Trade Commission data. In comparison, this group accounted for 2% of identity fraud reports each year between 2021 and 2023.
Thieves may use a child’s Social Security number, name and address, or date of birth to do things like apply for government benefits (such as health insurance or nutrition assistance), open a bank or credit card account, apply for a loan, sign up for utility services, or rent a residence. According to the Federal Trade Commission. Financial professionals say locking down children’s credit won’t prevent all of these problems, but it’s a solid step in the right direction.
It’s not just strangers who commit fraud against children. Cole gave the example of a friend whose uncle destroyed his credit and began using his niece’s name and Social Security number to open credit cards and maximize them. He sent the bill to his home, and the young woman discovered the fraud about four years later, when she went to buy a small fixer-upper and realized she had nearly $50,000 in debt to her name and her credit score It is also at a lower level.
The niece filed a police report, filed a complaint with the Federal Trade Commission and filed a dispute with the credit bureaus, but it took time to resolve. Cole said she applied for a secured credit card on a temporary basis because her score was too low to qualify for a traditional credit card, and the situation delayed her home purchase for several years, ultimately costing her more.
Check if your child has a credit report
Before locking your child’s credit, it’s a good idea to check with the three major credit bureaus to see if there is a report. Generally, this only occurs when someone fraudulently withdraws credit in the name of a minor, or when a child is designated as an authorized user of an adult’s credit card.
To check if a child has a credit report, parents can mail a credit report Letter of request to each credit bureau. They should be sure to provide a copy of the child’s birth certificate, Social Security card or document from the Social Security Administration showing that number, and a copy of the parent’s driver’s license or government-issued ID with a current address. The legal guardian may be required to provide the credit bureau with a copy of a document proving their identity.
If there are problems with your report, contact the company where the fraud occurred and the three major credit bureaus. Also report identity theft to children Federal Trade Commissionincluding as much detail as possible.
If the report is correct, the next step is to actually lock in the child’s credit.
Freeze your child’s credit if needed
The process for initiating a credit freeze is slightly different depending on the credit bureau and the age of the minor child. Be sure to follow each credit bureau’s precise instructions. For Equifax, in addition to the required documents, parents will also need to fill out a form Submit online and by mail; minors aged 16 or 17 may request their own security freeze by phone or mail. The website is Experian and TransUnion Provide more details about their respective processes, including documentation requirements and mailing addresses. Bureaus may take several weeks to process these requests.
Keep good records to unlock later
Bruce McClary, senior vice president of membership, said parents need to keep the password provided when locking their child’s credit so it can be temporarily unlocked if needed, such as when the child turns 18 and wants to apply for a credit card .
The unlocking process is not necessarily seamless and may take time. For example, Equifax requires that these requests be made in writing and accompanied by Required documents For authentication purposes. After age 18, Equifax allows security freezes to be managed online.
Educate children as early as possible to protect personal information
McCrary said parents should discuss best practices for sharing personal information with their children. For example, they should remind children to be careful about the type of information they give to websites and apps and to keep their Social Security numbers.
Parents may also want to consider credit or identity threat monitoring services or both. Some providers may offer basic services for free, but family plans that include adults and children and offer a combination of credit and identity theft protection often come with a fee. These services cost about $24 per month or more and offer more comprehensive protection, including identity theft insurance and fraud resolution services. Parents should carefully weigh their options to understand the options and associated costs.
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