Most parents would go to great lengths to protect their children. However, many overlook a relatively simple way to boost a child’s financial security: freezing the minor’s credit.
That could be especially important after a major breach in which the Social Security numbers of myriad Americans may have been sold on the dark web. While locking their credit won’t solve all the cybersecurity issues related to stolen Social Security numbers, it’s an extra layer of protection parents can put in place.
The credit locking process involves contacting each of the three major credit bureaus — Experian, Equifax and TransUnion — and providing the required documentation, such as the child’s birth certificate, social security card, proof of address and parent’s ID. The bureau then creates a credit report for the child and then locks it, so no loans or credit cards can be issued using the child’s personal information. The freeze remains in effect until the parent, or in some cases, the child, requests that it be lifted, temporarily or permanently.
Parents can take these steps proactively even if there is nothing to indicate that a minor’s credit has been compromised, such as unexpected credit card applications or bills taken out in the minor’s name.
It may take some time and effort to lock in a child’s credit, but the expense is minimal compared to a long and emotional process of rebuilding credit. “As an adult, if our credit is stolen, it makes us angry, but we do what needs to be done and move on,” said Kim Cole, director of community engagement at Navicore Solutions, a nonprofit credit and housing counseling firm. But for children, the emotional impact is far greater, she said. “It can take years to address a problem, and in the meantime the damage can continue to mount.”
Identity theft in children — especially very young ones — often slips under the radar until they’re older teens or young adults applying for their first credit card, trying to finance a car or looking for student loans, said Loretta Roney, president and CEO of InCharge. Debt Solutions, a non-profit provider of credit counseling and other services.
However, identity theft for children under 19 is a growing issue, with this demographic accounting for 3% of all identity theft reports for the first half of 2024, according to Federal Trade Commission data. In comparison, this demographic accounted for 2% of identity fraud reports each year between 2021 and 2023.
Thieves may use a child’s social security number, name and address, or date of birth to do things like apply for government benefits such as health care coverage or nutrition assistance, open a bank account or credit card, apply for a loan, register a shared service or rent a place to live, according to the FTC. Locking a child’s credit won’t protect against all of them, but it’s a solid step in the right direction, financial professionals said.
It’s not just strangers who commit fraud against children. Cole offers the example of a friend whose uncle had ruined his credit and started using his niece’s name and Social Security number to open credit cards and max them out. He was sent the bills to his home, and the young woman didn’t discover the scam until four years later when she went to buy a small top and realized she had nearly $50,000 in debt to her name and a credit score in the low 500s.
The niece filed a police report, a complaint with the FTC and disputed the information with the credit bureaus, but it took time to resolve. She applied for a secured credit card in the interim because her score was too low to qualify for a traditional card, and the situation pushed back her home purchase by a few years, costing her more, Cole said.
Check if the child has a credit report
Before locking a child’s credit, it’s a good practice to check with each of the three major credit bureaus to see if there’s a report. Generally, this will only apply if someone has fraudulently obtained credit in the minor’s name or if the child has been named as an authorized user on an adult’s credit card.
To check if their child has a credit report, parents can send one letter with their request to each of the credit bureaus. They should definitely include a copy of the child’s birth certificate, Social Security card or document from the Social Security Administration showing that number, and a copy of the parent’s driver’s license or government-issued ID with current address. Legal guardians may need to provide the credit bureaus with a copy of the documents certifying their status.
If something wrong appears on the report, contact the companies where the fraud occurred, as well as the three major credit bureaus. Also report child identity theft to FTCincluding as many details as possible.
If the report comes back clean, the next step is to lock the child’s credit.
If necessary, freeze a child’s credit
The process for initiating a credit freeze varies slightly depending on the credit bureau and the age of the minor child. Be sure to follow the exact instructions for each credit bureau. For Equifax, in addition to the required supporting documents, parents must complete a form electronically and submit it by post. minors who are 16 or 17 years old can request their own security bond by phone or mail. The websites for Empirical and TransUnion provide further details of their respective processes, including document requirements and mailing addresses. It may take a few weeks for the offices to process these requests.
Keep good records for unlocking later in life
Parents should keep the pin number they’re given safe when they lock their child’s credit so it can be temporarily unlocked as needed, such as when the child turns 18 and wants to apply for a credit card, said Bruce McClary , senior vice president of membership and media relations at the nonprofit National Foundation for Credit Counseling.
The unlocking process is not necessarily seamless and may take time. Equifax, for example, makes these requests in writing, with required documentation for identity verification purposes. After age 18, Equifax allows you to manage your online security freeze.
Educate children early in the protection of personal data
Parents should talk to their children about best practices when it comes to sharing personal information, McClary said. For example, they should warn kids to be careful about the kinds of information they provide on websites and apps and to keep their Social Security number close to the vest.
Parents may also want to consider looking into credit threat or identity monitoring services, or both. Some providers may offer basic services for free, but family plans that include adults and children and offer a combination of credit and identity theft protection tend to be fee-based. These services — which can run around $24 or more per month — may offer more comprehensive protection, including identity theft insurance and fraud resolution services. Parents should weigh the options carefully to understand the options and the associated costs.
