Kids, Credit and Credit Ratings

You probably have never given much thought to your young child’s credit history and rating. However, the increase in identity theft means dads have to be more vigilant about protecting their kids from thieves who will take their financial identity, often not to be discovered for many years. As crises go, this one isn’t earth shattering, but the Federal Trade Commission, the federal agency that tracks identity complaints, says that 11,600 complaints for victims under 18 were filed in 2005. This is roughly double the number filed in 2003. Many of these are fraud cases involving relatives, but some involve real theft too.

What can dads do to protect their kids?

1. Guard their social security number. Social security numbers should only be given out for financial and tax purposes, and medical reasons; so ask yourself whenever anyone (school, community groups) demands your child’s social security number. That goes for parents as well. At some point, the social security number could become a national ID number, but this has not yet occurred.
2. Understand how someone could use his or her number, so you understand why a child with no credit could be a target. Anyone working needs a social security number.
3. Watch the mail. Is your son or daughter suddenly getting mail solicitations for credit cards and loan products? This may be a warning sign that someone has used his or her number and your child has been identified as financially mature.
4. It’s not a bad idea to consider checking your child’s credit report, which you can do for free each year. You can also place a fraud alert on their records, but that has to be renewed every 90 days.

   Companies exist, like LifeLock (www.lifelock.com) that will track your credit and can add your children to their alerts. These are checks you can do for free by asking for a credit report, but may be worth the fees ($10 per month plus add-on of $25/year per child) if you are concerned.