It may seem strange to you even to think of freezing your child's credit. Has your son or daughter gone on a credit binge at your local toy store or candy store? Why would your child even have credit in the first place?
Your child probably doesn't have credit, but he or she does have a Social Security Number (SSN) – which is a tempting target for identity thieves. The Identity Theft Resource Center (ITRC) reports that children are over fifty times more likely than adults are to have their identity stolen.
A child's SSN is a blank slate for thieves to use in creating a false identity. Since you are unlikely even to check for any credit in your child's name, the theft may go unnoticed for years, causing significant and long-lasting damage. This type of identity theft may not be discovered until your child prepares to leave for college or the working world, only to find that he or she can't qualify for financial aid, loans, or any form of credit.
Look for potential red flags that suggest your child's identity has been stolen, such as receiving mail in your child's name for pre-approved credit cards, loyalty programs from merchants or travel companies, or other offers of credit. In more extreme cases, you may be receiving bills or calls from collection agencies trying to collect on goods or services your child allegedly purchased, or receive an IRS notification that your child paid no taxes on his or her "income".
You can protect your child from identity theft by freezing your child's credit before it even begins. A credit freeze prevents any potential creditor from accessing the account, even if the account holder is the one requesting it. For minors, a parent or guardian must establish the credit account and then apply a freeze to it. When your child comes of age, the freeze may be lifted – but in the meantime, the account is secure.
To apply a credit freeze, you must contact each of the three major credit bureaus (Equifax, Experian, and TransUnion) and apply an individual freeze with each bureau. As of September 21, 2018, federal law prevents the bureaus from charging you to apply a credit freeze, or to lift that freeze. That applies to both adult and child credit freezes.
While a credit freeze will stop thieves establishing an account in your child's name, it will not stop "synthetic identity theft" – when thieves use your child's Social Security Number but match it up with a fake name and birthdate instead of using your child's information.
To achieve the final layer of security, check your child's credit report periodically for any account activity. By law, you are entitled to one free credit report each year from each of the three credit bureaus. Sample letters for requesting your child's credit are available from the ITRC.
Take the time to verify that your child isn't a victim of any form of identity theft – or, if your children are precocious, that they haven't been racking up charges at the toy store. Either way, you need to know.
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