As of today, fees previously associated with a credit freeze have disappeared. This has renewed the conversation around placing a credit freeze and identity protection. Last fall in the wake of the Equifax data breach, we shared strategies for adults to protect their credit. But, this leaves a vulnerable population prey to criminals: minor children. Should you consider a credit freeze on your kid’s credit profile?
Kids Are More at Risk
We don’t have to remind you how much damage can be done when someone’s credit and identity have been compromised. The risk and impact of doing this is even steeper for kids. Last year, over 1 million children were victims of identity theft; 2/3 of them were under 7-years-old. During the Equifax debacle, 39% of those notified were minors.
To add another layer of terror, the damage to minors can simmer undetected for years. It often doesn’t come to light until your 18-year-old goes off to get her first credit card and is rejected. Like adults, unwinding this process can be painful and time consuming.
What Does a Freeze Do?
A credit freeze essentially restricts the ability for anyone (including you) to open new accounts under your child’s name. This means, you’ll have to remember to unfreeze it down the line when Junior is ready for his first cell phone or car.
Free to Freeze
One (very thin) silver lining of the 2017 Equifax data breach was an increase in consumer protection through the form of legislation. An amendment to the Fair Credit Reporting Act now requires that the three major credit bureaus (Equifax, Experian and TransUnion) offer credit freezes (and thaws) free of charge.
In addition, a new law was passed (The Economic Growth, Regulatory Relief and Consumer Protection Act) which in part, allows parents to set up credit profiles and freeze them for children under 16-years-old. Previously, credit freezes cost about $10 each and typically weren’t available for minors unless their identity had already been compromised.
Unfreezing your child’s credit is similar to the process for adults; however, unlike adults it cannot be temporarily lifted for a short period of time. The process would have to be removed completely and begin anew. When your minor turns 18, she can delete or lift it herself if you haven’t already done so on her behalf.
Complications and Drawbacks
In creating a report for your child, you’re essentially tying your child’s name to their Social Security number. This won’t protect against synthetic identity theft, in which fraudsters combine both real and counterfeit information to create identities. This is common in medical or employment fraud cases.
Creating a report for a minor can’t be setup online, which I found to be a dichotomy of this whole process since most identity theft is cybercrime. This means you’re hard-mailing personal information (like Social Security numbers, copies of ID, birth certificates).
As a parent, you’ll need to keep track of the PIN associated with your child’s, and remember to lift the freeze on the report once the child becomes an adult.
- Create a protected record for your kid through TransUnion, Equifax and Experian. Since your child hasn’t had any activity to establish a credit report, you have to establish one for them proactively.
- Compile and mail the various identification requirements requested by each credit bureau. They vary slightly, but generally include:
- A written request to place a “protected consumer freeze” on your kiddos account.
- Basic info on your child (copy of birth certificate, Social Security number, etc.)
- Basic info on you (address and contact info, copy of your ID, Social Security card, etc.)
- Basic info that you two are tied together in some legal fashion (birth certificate, power of attorney, order from court, etc.)
If you decide to do this, overnight the documents and use tracking. There is just too much private information there to be plucked out of a mailbox.
Aside from freezing your kids’ credit, here are some other ideas to help protect their identity:
- Keep their information as private as possible. Don’t carry their Social Security card in your wallet.
- Lock up documents. Keep your Social Security cards and birth certificates under lock in key in a file cabinet or fireproof box. And don’t leave the key in it!
- Keep an eye on things. Use a tool to continuously monitor the account. If you receive a jury summons or credit card offers for your minor, or if you receive a call from a debt collector in their name, take it as a sign that their identity may have been compromised and investigate further.
If you’re looking for more tips on ways to protect your identity (many of which could translate to your little one), check the previous entries we wrote on the topic “5 (More) Tips to Stay Safe Online” and “Tips for Identity Safety.”