10 Ways to Shield Your Keiki From Credit Fraud
Here’s what you need to know to keep your child’s credit record clean for the future.
As adults, we safeguard our keiki from physical injuries (helmets and knee pads), harmful germs (soap and hand sanitizers) and bullies (karate class).
What we may not do, however, is protect our keiki from identity theft and credit fraud.
The threat is real. More than 1 million children in the United States were victims of identity theft in 2017, according to the 2018 Child Identity Fraud Study by Javelin Strategy & Research. Of that, two-thirds were under age 8.
Little ones are especially vulnerable to such crimes. Not only are kids’ credit slates clean, but thieves usually have more than a decade to open fraudulent accounts under a child’s name and rack up spending before the damage is discovered.
The results can be disastrous when children become teenagers. They may not be able to apply for college, financial aid or car loans. Landlords may reject their rental applications. And you will spend years cleaning up your child’s ruined credit.
So, what can you do to financially safeguard your keiki now? Here are three things to consider:
Keep a Close Watch
• Be vigilant about your child’s personal data. Know who has your child’s full name, birthdate and Social Security number. Typically, these are your child’s schools, medical and dental offices, sports leagues, clubs, even contests you might have entered for your child.
• Regularly monitor your child’s identity. Thieves want to know about your child’s Social Security number, social-media and online activity, passport number and photo, birth or adoption certificate, savings accounts, education plans and other investments. Contact the three national credit bureaus—Experian, Equifax and TransUnion—to check for suspicious activity connected to your child’s Social Security number. Typically, children do not have credit reports at the bureaus. But, with your consent, the bureaus can create a credit file for your child. Some parents do this to keep tabs on their children’s credit.
• If your child has a credit file, “freeze” the file. This prevents thieves from opening fake accounts in your child’s name. You’ll need a PIN to do this. When your child turns 16, this is the time to lift the file and prepare your child for when he or she turns 18. A trusted person (such as an estate attorney) should also know the PIN.
Know These Red Flags
• Your child has a credit report that you did not start at the national bureaus—Experian, Equifax and TransUnion.
• Collection notices, bills, tax returns and credit card papers arrive in the mail in your child’s name. Be wary of mail addressed to your child that is unrelated to children’s magazines, subscription kits and letters from extracurricular activities and schools.
• An adult in the child’s life suddenly has an influx of income—with no traceable origin. This can be an estranged parent, debt-heavy relative, even a neighbor, teacher or coach who is familiar with the child’s family.
Clean Up the Trail
• If your child’s identity was stolen, visit identitytheft.gov to report it to the Federal Trade Commission. This helpful website will walk you through the recovery process.
• Contact one of the credit bureaus below to place a “fraud alert” on your child’s name and credit. This will alert the other bureaus.
• Contact the companies where your child’s fake transactions occurred. Explain to them that your child is a minor and that all accounts connected to your child’s name should be immediately closed. Follow up with the companies to make sure that your child’s name is cleared.
• As previously mentioned, if your child has a credit file, “freeze” the file to prevent financial activity under your child’s name.
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