Parents place the utmost attention on their children's safety, education, health and happiness. But even the most conscientious parent may overlook another matter that can affect their child's future: the child's credit report.
With some exceptions, most children under age 18 should not have a credit report at all. Minors, however, are not immune to identity theft and credit fraud. So you need to see if your youngster has a credit report -- and you need to know what is on it.
"Ideally, and in the vast majority of instances, your child would not have a credit report," says Rod Griffin, director of public education for credit reporting agency Experian. "It's a good idea for a parent to check."
Checking is especially important if you suspect your young child is the victim of identity theft. Teens also should check for credit reports in their names if they suspect someone may be using their name and Social Security number to commit credit fraud.
Unless identity theft and credit fraud are caught and corrected, they can hinder a child's ability to get credit, jobs or housing once he is an adult.
Protecting their financial future
Some children might legitimately have a credit report. For example, a teen might have a report if parents authorized him or her as a user on their credit card.
However, in most other cases, the existence of a credit report tied to a child is a sign of nefarious activity. Identity thieves can use a child's Social Security number to open credit card accounts, apply for loans or government benefits, or rent an apartment, the Federal Trade Commission notes.
"It's a good idea to check whether your child has a credit report close to the child's 16th birthday. If there is one -- and it has errors due to fraud or misuse -- you will have time to correct it before the child applies for a job, a loan for tuition or a car, or needs to rent an apartment," the FTC says on its website.
Do not delay if you see signs that credit thieves already have established a report in your child's name.
The Identity Theft Victims Assistance Network cites several warning flags, including:
- A child receiving credit card applications, other financial offers or government notices related to taxes or benefits
- A child having a bank account application denied because of poor credit history
- The mere existence of a credit report in the child's name.
Finding a child's credit status
The three national credit-reporting companies -- TransUnion, Equifax and Experian -- do not knowingly keep data on children younger than 13, according to AnnualCreditReport.com .
That website -- which is the official website where you can get free access to your credit report -- outlines steps to take if you suspect fraud involving your child's identity. Such steps include alerting all three credit reporting agencies, filing a police report and filing a complaint with the Consumer Financial Protection Bureau. You also can file a complaint with the FTC .
U.S. consumers are entitled to receive free annual credit reports from each of the three reporting agencies through AnnualCreditReport.com or by calling 877-322-8228. Minors age 14 or older may request a free credit report through the site, or ask their parents to do so on their behalf, Experian's Griffin says.
"If you're able to get through the authentication process, we would either return a report for you or say that there's no credit report on file," Griffin says. "If you're not able to complete the authentication process, we would ask you to write and provide documentation."
Such documentation includes copies of your driver's license, the child's birth certificate and Social Security card, and proof of address, according to the Experian website.
Rules at the three credit bureaus
Each of the reporting bureaus provides specific directions for requesting a minor child's credit report. Making such a request is the first step in clearing the record if an inaccurate or fraudulent file exists.
Below is a summary of the rules for the three credit bureaus. For more details, download our printable PDF on how to get a child's credit report from each of the three credit bureaus.
TransUnion offers an online form to help determine whether your child may be an identity-theft victim. If the company finds a credit file on your child, it will seek more information from you.
Equifax instructs parents to contact its Minor Child Department in writing, and to provide copies of the child's birth certificate and Social Security card, proof that you are the child's parent or legal guardian, and a copy of your driver's license or other government identification. Equifax says it will notify you and remove the child's file if it exists.
Experian requires parents to mail in documentation if they want to know whether the company has a credit file on their child age 13 or younger. Experian provides a form for doing so.
If a child does have a questionable credit history, Griffin says, Experian will add a security alert to the file, include a note to say the child is a potential fraud victim, and freeze the file at no cost. When the child is older, he or she can lift the freeze and have access to his or her report, Griffin says.
Family members and credit fraud
In some cases, family members themselves are the ones obtaining credit fraudulently in a child's name. Foster children are particularly vulnerable to identity theft. "They're a target, unfortunately, in many cases," Griffin says.
Griffin has worked with teachers who try to help students to address fraud issues. In such cases, the minors may need to file police reports and affidavits against family members. "It's a really heart-wrenching, difficult circumstance," he says.
Federal law requires child welfare agencies to obtain annual credit reports for foster care youths ages 16 and older, and to help them clear up their records in cases of identity theft, according to the FTC.
Data breaches at health insurers and other companies also may expose children to identity theft. Do not ignore any notices you receive indicating that you or your family may have had personal information exposed in a data breach. Instead, respond appropriately, Griffin says. "You need to be actively engaged in protecting your information and your children's," he says.
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