We’ve all heard about the precautions we should take to protect our own credit, but now that may not be enough. An increasing trend is for identity thieves to seek out the social security numbers and identifying information of children. This creates a unique problem since most parents wouldn’t even think to pull their child’s credit history since they obviously know they aren’t old enough to have any financial accounts. So, how are criminals even able to obtain this information, and how is it even possible the social security number of a minor get through the credit systems?
Lack of Age Verification
The biggest problem is that there is a lack of age verification for many card issuers. Many companies don’t require any validation to prove age, and applications on the internet may simply ask for a date of birth but have no way to verify it. So, this makes it possible for an identity thief to use their name and social security number and simply make up an age in order to get through the application process.
A second mistaken assumption is that the credit reporting agencies know that an application must be fraudulent because the applicant is a minor. Unfortunately, there is little, if any, sharing of information about the age of a person with Equifax, TransUnion and Experian. The age of the applicant becomes “official” with the first credit application. For example, if the first application indicates that the applicant is 24, the credit agencies believe that person is 24 until a dispute is filed and proven.
Problems Can Haunt a Child Long After the Crime
With adults, discovering identify theft usually happens relatively soon after the fact if they check their credit history once a year. Unfortunately, this typically isn’t the case for children. For example, say your 5 year old child’s social security number is somehow obtained and credit card accounts are opened. You or your child may not find out there was anything wrong for another 13 years when they apply for a loan or a credit card and are mysteriously denied.
Sure, most negative marks on your credit history drop off after 7 years, but keep in mind that criminals will use working methods for as long as possible, and may even sell the information to others who will go on and continue to use it in the future. So, your child’s credit history may be be getting ruined for years before it is ever detected.
Keeping Your Child’s Information Safe
When it comes to keeping your child’s information safe, most of the same practices you’d use apply. This includes being very careful about who you give sensitive information to, shredding or locking up documents that contain this information, and avoiding scams. But you also have to be careful when a child is young and there are instances where you have to provide their birth certificate to verify their identity. This can happen for schooling, doctor visits, and so on.
This is especially true with many school sports where the school and/or coach may require a birth certificate or social security number in order to participate. If this is the case, you might ask why, and how the information will be used and stored. You also want to make sure you aren’t carrying your child’s information with you. Obviously this may be convenient if you don’t have their social security number memorized and have to fill out paperwork, but this is also very dangerous.
Keeping this information safe is really a matter of being cautious and using some common sense, but don’t take for granted that because they are a minor that their information can’t and won’t be used. It also makes sense to occasionally pull their credit report as well just to make sure there isn’t any suspicious activity.
Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.
Once I originally commented I clicked the -Notify me when new comments are added- checkbox and now each time a comment is added I get four emails with the same comment. Is there any method you may take away me from that service? Thanks!
I agree with Amanda. I've got twins on the way and I plan to freeze the kids' credit (like my wife and I have done) as soon as they have social security numbers. Then when they're older (~13 or so is my guess) I'll think about letting them begin to build their credit.
Freeze the credit reports of your children until they reach the age of majority. Write to each credit agency certified mail and ask that your child's credit report be frozen -- you have to give different information to each agency. If your child's credit report is frozen, no potential creditor can see their credit history so it will be much less likely that credit is issued in their name.
I have 1 year old twin daughters and given that length of credit is a big part of your credit score, I have been considering opening cards for them as soon as possible (not as soon as reasonable). I actually suggested to my wife that we open cards for them in the next few months so if done, I would be reviewing their credit reports regularly to avoid any fraud like this.
The crazy part is that the credit agencies will believe that a person is a certain age (upon first application) until a dispute is filed and proven. Verification should be priority.