How to protect your kids’ credit scores

Do kids even have credit scores and credit reports? The short answer is, “No.” But if you start receiving mailed credit card solicitations or strange debt collection phone calls for your child under 21, it could be a tip-off that their identity may have been compromised, in which case, they may have a fraudulent credit file.

The only legitimate way your child under age 18 could have a credit report and a credit score is if you added them as an authorized user to your credit card account and they have had it open for at least six months, according to FICO. And, it is illegal for credit card companies to solicit or issue credit cards to those under 21 without proof of employment for independent repayment or a co-signor over the age of 21 due to the federal Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009.

So if kids have no credit, you might wonder why thieves would even try to steal it?

The reason is because nobody is routinely checking these credit files and so fraud could go undiscovered until your child finally reaches the age of applying for a credit card, a car loan or a mortgage.

With just a child’s social security number, identity thieves can fabricate a false identity using a different birthdate and open all sorts of accounts in their name. Because they are linked to the child’s social security number, this can negatively affect student loan applications and even government benefits eligibility and your taxes.

How could thieves get my child’s information?

As of April, 2015, the Identity Theft Resource Center reported a total of 200 breaches, however educational and medical breaches pose the highest threat to your child’s information. Just think what kind of information you gave about your child that is stored at your child’s schools, doctor’s offices and with your health insurance. According to the breach report, while educational breaches made up just 9% of total breaches so far this year, medical and healthcare breaches accounted for 34% of total breaches but with the highest amount of records stolen out of all types of breaches.

All ages of children under 18 are at risk. However, teenagers and college students were least concerned about fraud, yet the most seriously affected, according to the Javelin 2015 Identity Fraud Study. Students were also the least likely to discover the identity fraud themselves and instead, found out when they were denied credit or received debt collection calls. Students are also four times more likely to take part in “friendly” fraud, compared to other consumer groups. Do you think kids give out the pin number to their debit cards, passcodes to their smartphones or lend their driver licenses to their friends? They do, I can tell you from personal experience with my own three teenagers.

Should I check my child’s credit?

The Federal Trade Commission (FTC) recommends that you check your child’s credit whenever you receive a data breach letter of any kind. If you are receiving credit card, financial mail, debt collection or solicitation phone calls in your child’s name, definitely check their credit file. Some more tip-offs are:

• If government benefits are denied to your child because they say he or she is already receiving them under that social security number.
• You are notified by the IRS that your child’s social security number was already used on another taxpayer’s return.
• You find your child does have a credit file, but you have never opened a credit account for him or her.
• Your young adult over 21 applies for and is denied for a credit card or a car loan because of a poor credit history including late payments and amounts owed (not just lack of credit history).

The FTC uniformly advises checking to see if your child has a credit report around his or her 16th birthday. If there is one you will have time to correct any errors or issues before your child applies for a job, student loans, a car loan or fills out an application for a lease.

How can I check my child’s credit?

The three credit bureaus – Equifax, TransUnion, and Experian – allow you to check for your minor child’s credit file, but to do it the way they require (to avoid identity fraud, ironically) seems risky in itself because you need to mail in copies of the following identifying documents:

* Your child’s birth certificate
* Your child’s Social Security number on an official social security document or card
* Your driver’s license or official state id card with your current address.

If any of the three credit reporting agencies have a credit file under your child’s social security number and name, request a copy and review it for fraud and errors. Check the birthdate carefully because this is how fraudsters set up fake accounts using the social security number. If the birth date is correct, then the credit reporting agencies are not allowed to disclose your child’s credit file to any third parties unless the consumer specifically request them to do so due to the CARD act.

If any information in the report is incorrect, start the dispute process immediately with each agency that contains a report on your child.

How can I protect my child’s credit file?

The three credit reporting agencies do allow you to place a “fraud alert” on your child’s credit report, if they have one, which requires creditors to verify your child’s identity before granting credit in his or her name. Even more protective is the “credit freeze,” (with variable costs, by state) which restricts access to your child’s credit report until the freeze is lifted.

If you suspect you child’s identity was used fraudulently, the FTC also has many online samples of letters and forms for victims of identity theft including an online form for creating an Identity Theft Report. If you have specific proof that your child’s social security number was breached such as a data breach letter and subsequent weird mail solicitations, then file a police report, too.