Does My Child Have a Credit Report?

A technical revolution took place in the past couple of decades, changing the way we do most anything — including whose name appears on credit card bills.

It could be your 5-year-old child!

You know your child doesn’t spend money or use credit cards — but identity thieves do not care how old their victim is. They only care about shifting money to their own accounts.

And if the scammers are successful, they could use your child’s name on something as simple as an authorized user on a credit card and suddenly your child has a credit report.

Understanding Child Credit Reports

Credit bureaus track credit accounts and payment history, including accounts opened illicitly in the name of an unwitting victim — and that includes children.

Your child normally should not have a credit score or credit report unless parents have added them as credit card users. The other ways to generate a credit report involve devious actions by scammers or fraudulent operators.

If your child begins receiving “You’re pre-qualified!!” mailers from credit card companies in the mail, it may mean that their identity has been compromised. A credit bureau is the safest and easiest way to find out. If someone opens a card or account in your child’s name, it will quickly wind up with one of the three credit agencies.

What is a Credit Report?

Experian, Equifax, and TransUnion are the three major credit reporting agencies. Most adults have a credit score with each of the three.

When you take out a loan or open a credit card account, you are tracked by these agencies. Your credit report includes the size of your debt, your success at making payments on time and any issues involving non-payment or defaulting on loans.

The combination of five factors — payment history, credit utilization, credit history, new credit, and credit mix — taken from the transactions you make, produces a credit score. That score is used by potential lenders — from mortgage brokers to automobile manufacturers to credit card companies who set your credit limit, to help businesses gauge your ability to pay debt.

You can check your free credit reports with all three agencies. It can be as easy as tapping a button on your banking app.

Why Children Usually Don’t Have Credit Reports

Your credit history begins being recorded when you take out a loan or get a credit card. Generally speaking, children don’t do the things that create a credit profile, so they have no credit history to track.

If a family member adds a child as an authorized user of a credit card, that would alert the credit agencies to begin a file. Clerical errors or, more alarmingly, identity theft, can also trigger creation of a credit report.

That’s what makes the credit agencies an easy place to check on your child’s financial security.

Signs a Child Might Have a Credit Report

The credit agencies can share your information with the companies that provide loans and credit to customers. If your child has a credit report, that information can get into the hands of banks and credit card companies.

If your child is receiving credit card offers, bills and collection calls, those are all signs that your child’s data has been spread illicitly. The IRS may contact you about unpaid income taxes if someone used your child’s Social Security number on tax forms for a job. Someone using your child’s Social Security number can also cause your child to be denied government benefits or a student loan.

If you see signs like these, check the credit bureaus immediately. Report and correct errors, fraudulent activity, and any other scams as quickly as possible.

When & Why to Check Your Child’s Credit Report

As a responsible adult, you should be aware of your own financial security and privacy. As a parent, you must take care to protect your child from online scams and identity theft.

That’s how much the world has changed during this technological revolution. You may never have thought about your credit score until you were applying for a mortgage. And yet, even the youngest and most vulnerable are now targets for scammers.

Protecting Against Child Identity Theft

A stolen identity can cause immediate financial damage to a family, including children. Worse, it can lead to ongoing financial crimes that remain undetected and uncorrected for years.

Online scammers, often using bots or other tools to safeguard their own identity, will target a victim and continue to steal from that victim until the theft is detected.

And yes, parents and other family members can also take advantage of a child’s identity to steal money themselves. They assume the child will not be charged with any crimes. Javelin Strategy & Research’s Child Identity Fraud Study found that more than 70% of child identity theft and fraud victims know the person who did it. A child may not be charged with any crime, but he or she will be burdened with a ruined credit rating unless action is taken to protect the child.

This is where caution and awareness come in. Protect your child’s personal data. Keep their Social Security cards and birth certificates in a secure location. Ask questions when a school or other entity asks for such information.

As a parent, you would take active measures to protect your child from physical harm or health-related dangers. The child’s financial well-being may not appear as urgent, but it can be compromised by anonymous scammers and thieves.

Routine credit checks are the easiest and safest way to monitor your child’s financial security.

Correcting Errors Before Adulthood

It is true that technology has created a lot of trapdoors the bad actors can exploit to steal identities and money from everyday citizens.

It is just as true that honest mistakes can create a lot of problems. Monitoring your credit report and your bank and card activity is still the best way to prevent or limit those problems.

There are people out there who have the same name as you or a child of yours. Maybe it’s off by a letter or two, but the names got recorded in the incorrect file and a new, mistaken identity is “created.”

Your Social Security number is of paramount importance to you and can also be accidentally confused if someone has a similar Social Security number. One transposed digit can lead to confusion and identity theft.

If an error occurs, it is important to correct it as soon as possible. With your children, it is essential that you correct errors, fraud attempts and identity theft before your child turns 18. You will have a much more difficult time helping them and fixing problems after they are legal adults.

Monitoring Credit Building (Authorized User Scenarios)

As mentioned above, a child’s first credit report can be generated by something as simple as making the child an authorized user on your credit card. As long as you act responsibly, making payments on time and managing the size of your balance, your credit score will rise.

And so will your child’s.

It is important to monitor both of your credit scores. Make sure your child’s isn’t corrupted by a scammer or an error and make sure your own is accurate.

How to Check Your Child’s Credit Report

In olden times (before the Internet), credit agencies seemed like top-secret government agencies. Interacting with them and monitoring your credit health involved the mail, finding addresses and buying stamps.

It is much easier and more open now. All three agencies have websites created for customers to monitor their credit profile, and each runs a separate process for parents and guardians checking on a minor.

General Process

Experian, Equifax and TransUnion each has its own process for parents and guardians who want to know whether a minor has a credit file. You will need documentation that you are the parent or guardian of the child whose credit you are checking. That documentation includes: your ID (a driver’s license will do), proof of address such as a utility bill, the child’s birth certificate and Social Security card, and legal guardianship documents if your name is not on the birth certificate.

Experian’s website has a Child Identity Theft Protection form. You can use it to check whether a minor has a credit report, add a fraud alert, or add and remove a security freeze, and you can upload your documents there.

TransUnion has an online Child Identity Theft Inquiry form. Submitting it tells you whether a credit report exists in your child’s name. If one does, TransUnion will contact you for more information, and you may need to request a copy of the report separately by mail.

Equifax handles minor requests by mail. Send a written request to the address listed on the Equifax website, along with copies of the documents above.

The Federal Trade Commission also recommends asking each bureau for a manual search of your child’s Social Security number rather than relying on a name match alone.

It is always a good idea to take advantage of your own annual credit report from any or all of the three agencies. Federal law entitles you to a free report from each agency every 12 months, and all three bureaus have permanently extended free weekly access through AnnualCreditReport.com.

Alternative: AnnualCreditReport.com (For Certain Ages)

Another option, related but separate from the three credit agencies, is AnnualCreditReport.com, the only federally authorized source for the free credit reports you are entitled to by law. It is widely reported that children aged 13 to 17 can request their own reports through the site. Keep in mind that neither the FTC nor the Consumer Financial Protection Bureau lists it as a route for minors; both agencies direct parents and guardians to the three bureaus instead.

For a younger child, contact all three agencies directly and follow each one’s minor request process. If you suspect your child’s identity has been compromised, also file a police report with your local law enforcement agency and file a complaint with the Consumer Financial Protection Bureau.

Documents You May Need

If you’re dealing with identity theft or a case of mistaken identity, then your own identity and that of your child’s becomes crucial. The credit agency must be certain of both, and they all require the same documentation:

Your child’s full legal name, birthdate, Social Security number and birth certificate prove your child’s identity.

The parent’s government-issued ID, such as a driver’s license, and proof of address, such as a utility bill, prove your identity.

If your name is not on the child’s identifying documents — if you’re a stepparent or legal guardian — then you will need proof of legal guardianship.

That may seem like a lot, but keep in mind that a scammer or bot can’t produce these documents. Only the parent and child can.

What to Do If a Credit Report Exists

If you suspect suspicious activity around your child’s identity and personal credit profile, your first hope is that you’re wrong and there are no credit reports with any of the three agencies.

But what if your suspicions prove correct? What then?

The first thing is to remain calm in the knowledge that these things are common, and that there are safeguards in place to protect you and your child. With that knowledge in mind, you can take decisive action.

Review the Report Carefully

A credit report may tell you exactly how your child’s security was breached. That will lead you to closing that gap in security and correcting any mistakes or fraudulent charges.

Look for unfamiliar accounts, such as credit cards or balance transfer cards. Those are direct ways for an identity thief to quickly grab some cash or goods without risk of exposure.

Inquiries or collection efforts could also tell you how the identity theft happened and also give you avenues to correct the record.

Errors or Signs of Fraud

Whether it’s an honest mistake or a deliberate criminal act, your first indications would likely be the same.

If your minor child begins receiving mail targeting an adult with a credit history, you should check for a credit report to find out why. These would include mail from credit card companies offering pre-approved cards or low interest rates; actual bills for loans or credit cards that you know are not legitimately your child’s, and phone calls or notices from debt collection agencies.

Once you find a credit report under your child’s identity, immediately dispute the errors with the credit bureau and the creditor directly. The Federal Trade Commission provides a Uniform Minor’s Status Declaration that will help you correct mistakes or remove fraudulent charges. Send a completed copy to each credit bureau with a letter asking them to remove all accounts, inquiries and collection notices tied to your child’s name.

Place Fraud Alerts or Security Freezes

Creditors want to prevent fraud and identity theft, too. It costs them money every time they have to deal with an error or scam.

You place a security freeze on a minor’s credit file with the credit bureaus — not with a bank or credit card company. Contact Experian, Equifax and TransUnion separately. If your child is under 16, the freeze is free and stays in place until you ask the bureaus to remove it. Minors who are 16 or 17 can request and remove a freeze themselves. A fraud alert, which tells lenders to take extra steps to verify identity before extending credit, is available through the same bureau processes.

This may be a good idea even before a crime is attempted using your child’s identity.

Watch out for even small charges made using your or your child’s identity. Scammers will often test their ability to make a fraudulent charge with a small, even negligible transaction. That could mean their next step is a larger, more damaging amount.

Report Identity Theft

Take identity theft and scams as seriously as if someone was reaching into your pocket. They are. Report every crime or attempted crime.

Contact the three credit bureaus to notify them of criminal activity. They are in a position to identify and combat attempted theft. Credit reporting is the first step in addressing these issues.

Contact local law enforcement. Your town’s police department may not be able to deal with criminals who may be across the country or across the ocean. But a police report is an important tool in documenting the crime and giving other agencies the ability to take action.

The Federal Trade Commission is an important agency to contact. Local police and the credit bureaus can help you deal with your or your child’s problems. The FTC is able to connect various crimes and deal with the larger threats that affect hundreds or thousands of people. Report child identity theft at IdentityTheft.gov, the FTC’s official reporting site, which will also build you a recovery plan.

How to Protect Your Child’s Future Credit

If you are unaware of identity theft or fraud using your child’s identity, and if you ignore the warning signs, the damage can follow your child into adulthood, when credit scores become important.

Identifying the warning signs, taking action and correcting errors and scams before your child reaches adulthood make all the difference. If bogus charges are reported, documented, and removed in a timely fashion, they should remain in your child’s past.

Teach your child to be aware of the risks, to protect sensitive information and to avoid contact with suspicious online vendors or advertisers. Monitor your child’s credit profile and then train them to monitor their own. Good financial habits can and should be taught. The FTC’s guide to protecting your child from identity theft has more on safeguarding personal documents and what to ask when a school requests your child’s Social Security number.