With unblemished credit, our kids are easy targets for identity thieves. According to a 2018 study by Javelin Strategy and Research, over 1 million children were victims of identity fraud last year.
Not only can identify fraud affect your child’s credit, often times the crimes often go unnoticed for years. In many cases the fraud isn’t realized until the victims apply for their first credit card, apartment or job and get rejected. Then, they can face huge battles to clear their names.
When a security freeze is in place, someone who applies to get credit using your child’s name and Social Security number will be rejected. Access to your child’s credit records will stay “frozen” until you say so, or until your child removes the freeze after reaching the age of 16.
Here’s what you can do:
Call all 3 credit bureaus and check if your children have credit files.
You should not find a credit file for your child because minors cannot enter into contracts. The only time you’re going to find a credit file is because it’s fraud or you have intentionally asked for a duplicate card for your child.
If you find there are no issues and there isn’t a file, then tell the credit bureaus that you want a file created for your child and you want to freeze it.
This is one of the best proactive things you can do for your child’s financial future. The law requires credit bureaus to create and freeze files for children under 16 at their parents’ request. Sixteen- and 17-year-olds can request a freeze themselves, and files must be created if none exists.
Request a credit freeze not a credit lock.
Credit bureaus will typically recommend a tool called a credit lock. It is a financial service product for sale and it does not come with the same protections as the federal law that was implemented in September of this year. A freeze is more work for the credit bureau, it puts them on far more liability, but doesn’t take any more effort for you.