A good credit history is the key to easier access to a variety of things as an adult. Not only does your credit score factor into your insurance rates and loan interest, but it can also affect your ability to get a job or an apartment. Unfortunately, some young adults find themselves suffering with bad credit and facing bankruptcy after an identity theft that occurred as a child. Here's a look at what you should know before your child's credit is ruined by identity theft and a resulting bankruptcy.
Why are Kids a Popular Target?
Most kids are issued a Social Security Number at birth, and that number will have no credit file and no criminal history attached. That makes it an easy number to use for obtaining credit approval. And, since most parents aren't monitoring their children's credit reports, these fraudulent accounts could persist for years without detection. By the time you or your child become aware of the problem, the damage is done and you're left to clean up the mess.
How Do You Protect Your Child's Credit?
There are no automatic programs that monitor and preserve a child's credit. That puts the responsibility on you, as the parent, to keep track of it. Some credit monitoring services will provide you with monitoring services for juveniles, but you shouldn't stop with that. Make sure that you're requesting your child's credit report every single year from the credit bureaus. If they respond and say there's no file for him or her, it means nobody has used that Social Security Number.
Are There Warning Signs of Identity Theft?
In addition to the information uncovered by credit monitoring, there are a few other early warning signs that someone's using your child's Social Security Number fraudulently. If you start seeing credit card offers, loan deals or subscription services reaching out to your child by mail, that's a red flag that someone has used his or her information.
In many cases, kids don't realize that anything has happened until they apply for their first credit card or for a loan to buy that first car. When your child is denied for credit, that's another key indication that something's gone wrong. It's vital that you address the issue right away, otherwise your child may be facing bankruptcy to discharge those outstanding accounts.
How to Deal with Child Identity Theft
If the damage has been done, it's time to get proactive about addressing it. Start with a call to local law enforcement. You'll want to get a police report on file that there's been an identity theft. This is vital, as it gives you a case number to provide to credit card companies and other credit agencies with open accounts for your child. Then, call each of those credit providers and cancel the accounts.
From there, you'll want to place credit monitoring on your child's Social Security Number with each of the credit bureaus. This will prevent identity thieves from opening new accounts on that number. Make every request in writing and get delivery confirmations.
If law enforcement is unable to identify the culprit and you don't have the evidence to get the credit accounts erased, your child is going to have some credit repair to do. In severe cases, this may mean working with a bankruptcy attorney to have the accounts discharged. Contact a professional like Richard S. Ross - Bankruptcy Attorney for more information.