Freeze or Lock, Safeguarding Your Child’s Credit History Can Save Them Later

Do you know if your child has a credit history? I’ll admit, even with all my work busting scams and investigating consumer complaints, I had never really taken the time to check.

But that’s changing — and many parents we talked to said they’ve either frozen or locked their child’s credit or are considering it, and some have even taken the steps to freeze their own to safeguard their hard-earned credit rating from would-be identity thieves and fraudsters.

After all, what happens now when your child is six or seven might not be uncovered until a decade later, when he or she tries to rent her first apartment, buy a car, or apply for a job. In fact, in 2017, more than a million children were victims of identity theft – and two-thirds of them were younger than age 8, a recent study found.

“It’s something I’ve wanted to do for a long time, but I don’t even know where to start,” said Jackie Spivey. “It feels overwhelming, which isn’t a good reason not to, but there it is.”

“I plan to freeze my son’s credit, it’s on the to-do list,” said Leia Grady.

And you may be very careful with your child’s birth certificate and social security number — ours is in a pretty safe location, for instance, that only two people have access to. But as reader Rachel Assi pointed out — that number is needed for a lot of things during a person’s lifetime, and all it takes is one data breach for it to be available to people with bad intentions.

“The problem is that online systems are very vulnerable to attack,” she said. “Also, medical records have SS numbers on them. There are thieves who target hacking systems with children’s numbers because they won’t get caught for nearly two decades. I think if it’s not a bad problem now, it will be soon.”

So what are the first steps?

According to the Federal Trade Commission, getting a credit report from each of the three national bureaus (Equifax, Experian, and Transunion) is the first start. We’ve linked you to each bureau’s methods for doing that.

“As for a manual search of the child’s file,” the agency said. “The bureaus will check for files relating to the child’s name and Social Security number, and for files related only to the child’s Social Security number.”

The bureaus may want copies of the child’s birth or adoption certificate, social security card, and a parent or guardian’s government-issued ID, or something like a utility bill or credit card to as proof of address.

Reader Amanda Bandt has the benefit of having worked in the credit industry, and explained why a credit report check is necessary.

“Children should not have a credit report. Checking to see if they have a credit report at all is the best indication of trouble (if they do, that’s a red flag),” she said.

What if you do find activity? The FTC says you should contact each company where the fraud occurred, and ask them to close the account and send you a letter stating your child isn’t liable for the debt. In Texas, you can also ask for a court order that states your child has been the victim of identity theft.

“Texas law provides victims of identity theft the option of seeking a court order declaring that you are a victim of identity theft,” the AG’s office said. “If you are granted this type of court order, you may submit it to private businesses and to governmental entities to help correct any records that contain inaccurate or false information which resulted from the identity theft.”

The Attorney General’s website has more information on reporting identity theft. You should also report the fraud to your local police, and file complaints with the Consumer Financial Protection Bureau and the FTC.

You should also reach out to all three reporting bureau’s and ask them to remove the fraudulent accounts from your child’s file as well.

Now, once you’ve done that (or you’ve received the welcome news that your child doesn’t have any credit activity), you can begin the task of asking each bureau to put a freeze on your child’s credit report.

What does that do?

“Once your report is frozen, the credit reporting agency cannot release it without your prior express approval (with certain narrow exceptions),” the attorney general’s website explains.

“The credit freeze restricts access to your child’s credit file, making it harder for identity thieves to open new accounts in your child’s name,” the FTC said.

It doesn’t, however, prevent your eventually grown child from getting their annual credit report, opening new accounts, applying for jobs, renting an apartment, etc.

“But if you’re doing any of these, you’ll need to lift the freeze temporarily, either for a specific time or for a specific party, say, a potential landlord or employer,” the FTC said. “It’s free to lift the freeze and free to place it again when you’re done accessing your credit.”

It also won’t prevent a thief from making charges on existing accounts, which is why it’s important to close out any fraudulent accounts you might find on your child’s credit report, and to keep a close eye on any savings accounts and such created for him or her.

“I recently froze all of my own due to my information being compromised,” said reader Jackie Thompson. “I am getting internet installed on Saturday and AT&T needed to run my credit today for a contract and I unfroze my account on the agency that they use and I refroze it immediately after. It was incredibly easy.”

But what’s the difference between a credit lock — like we hear about with services like LifeLock or the one Exquifax offered after it was hit with a data breach?

In a word, ease. It’s easier to unlock than it is to unfreeze. And while federal law governs credit freezes, it doesn’t govern credit locks, which means if the freeze wasn’t placed by one of the bureaus even though you asked, or your information is breached anyway, you have legal recourse.

The language on credit locking service agreements often says that there’s no guarantee it’ll be a complete failsafe.

Also, credit locks cost something — credit freezes are free, thanks to a law that went into effect last month.

Each bureau has a different method for freezing accounts, so you’ll need to reach out to Equifax, Experian, and Transunion individually (we’ve linked you to the appropriate pages). Once your child is 16, the freeze you place now will expire, but they can file for another freeze themselves.