Did you know that there is no mechanism within the credit reporting industry to link a credit report to a person's age? That was just one of the major lessons I learned while researching this article. What this means is that a Social Security number of a child can be just as valuable as that of an adult to an identity thief. I was also shocked to learn that one in ten children in the United States are victims of identity theft.
Many States Are Now Enacting Laws To Deal With Child ID Theft
There are a wide array of reasons that a child's Social Security number is an attractive target to an identity thief. The number can be used not just to apply for credit, but also as a means of obtaining government benefits, or even by someone illegally working in the U.S. What is also interesting to note is that it is possible to take a child's Social Security number and then associate it with the thief's own name (there is no system by which a Social Security number is automatically attached to a person's name. This only happens the first time a person uses that number to apply for credit). Some may take on your child's name, while others could use their Social Security number while applying for credit using their own name.
One scenario that would be easy to pull off is to get a child's Social Security number and then build credit with that number using secured credit cards for a year or two. After establishing a decent payment history, that credit file would be worthy of unsecured offers and then the sky is the limit. This can take years to untangle, and most kids don't find out about it until they go to apply for college loans years later. Talk about ruining a young person's life... I can't imagine what it would be like to end up in such a situation when you are just trying to get a start in the world. Perhaps the most horrible part of this is that many times it is a relative of the child that is the ID thief. Yes, a parent, an aunt or uncle, or even a grandparent, may quietly build a second credit file for themselves using a child's Social Security number. Imagine already having a bankruptcy or a foreclosure on your credit file before your eighteenth birthday!
7 Tip Offs That Your Child's Identity May Have Been Stolen
*** While some of the below may seem obvious, many simply dismiss these events as clerical errors and don't consider the very real possibility of child ID theft. I have had people contact me laughing saying things like, "What would someone want with my eight year old's Social Security number."
1. You receive a notice from the IRS stating that your child owes taxes.
2. Your child begins receiving credit offers in the mail.
3. You are turned down for a government benefit and told that your child's Social Security number is already being used by another person.
4. Your child is receiving collection notices or phone calls for unpaid bills.
5. Your child is turned down for college loans.
6. Your child is unable to get approved to open a bank savings account.
7. Your child is turned down at the DMV for a driver's license.
Now, things can get even more dark for a young victim of ID theft. If the above consequences are not enough, your young person may even face being arrested for bounced checks or other crimes that took place in their name.
Steps You Can Take To Protect Your Children
1. Obtain a copy of their credit report from the three major credit bureaus. This process is no different than that which you would embark on for your own credit file. Each credit bureau has a slightly different process, but it is almost identical to the steps you would take to obtain your own credit report.
2. If your child's reports have no activity, they are in the clear for now. To prevent any future ID theft, the easiest strategy is to have your child's credit frozen. This will cost around $10 (varies by state and is sometimes free) and will essentially lock down your child's credit and require a special pin code to be used to 'unfreeze' the file in the future.
3. In addition to a credit freeze, it is a good idea to check your child's credit report every year or two to be sure there continues to be no activity.
4. Carefully guard your child's Social Security number, just as you would guard your own. I would always ask if it is possible to use an alternative means of identification with medical providers, schools, or other organizations wanting your child's Social Security number. Although not necessary, an ID thief may have even greater opportunity if they also had your child's birth certificate and physical Social Security card as well. These documents should be kept in a secure area of your home.
Although I see no harm in it, I am not a fan of identity theft services as a credit freeze does the trick for a one time cost. There are also other means of getting free credit monitoring as well. Please use the comments section below to share your own identity theft story or prevention strategy.
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