Editorial Policy

5 ways to protect your teen's credit

Tina Orem

February 12, 2015

If you're the parent of a teenager, you've probably marveled at how quickly they can learn to drive a car and use a smartphone, but somehow are baffled at how to use the vacuum cleaner.

Vacuum cleaners aside, your kid is probably smarter in some ways than you were at his age. The only problem is, so are the crooks who want his identity.

Child identity theft is the fastest growing type of identity theft; each year between 500,000 and 750,000 minors are affected, according to Robert P. Chappell, author of “Child Identity Theft.”

Only about 2.5 percent of U.S. households with children experienced child identity fraud , according to the Identity Theft Assistance Center. But the crime may be under-reported because family members are the perpetrators 27 percent of the time and the crime often isn't discovered until years later.

What can you do to make sure identity thieves don't set your child up for a rude awakening as an adult? We talked to some experts, and here's what they said.

1. See if your teen has a credit report. If your kid has a credit report to check, you might already be in trouble. “If they haven't been a victim of identity theft, they shouldn't have [a credit report], unless you have opened a credit card or loan in their name,” says Jeff Hunter, editor-in-chief of SimpleThriftyLiving.com.

 (See sidebar: How to get your underage child's credit report)

Note that minors may request a copy of their credit reports from AnnualCreditReport.com at age 13, according to Rod Griffin, who is the director of public education at Experian. If you want a credit report for a child under 13, however, you'll need to contact each of the three credit reporting companies and provide documentation such as a copy of the child's birth certificate, a copy of the child's Social Security card, a copy of a government-issued ID car for yourself with a current address, and a copy of a current utility bill with the same address. You may also need to prove that you have legal custody of the child.

2. If your teen has a credit record, freeze it. Your teen could legitimately have a credit record if, for example, you've made him an authorized user on one of your cards. But Alexis Moore, a cybercrime expert and co-author of “Cyber Self-Defense: Expert Advice to Avoid Online Predators, Identity Theft, and Cyberbullying,” says to put a credit freeze on your teen's credit with all three major credit bureaus (Experian, TransUnion and Equifax). Credit freezes mean the credit report has to be unlocked (or “thawed”) before a potential lender can get access. Add a note to the credit file, known as a consumer statement, saying that anytime someone inquires about your teen's credit, they have to contact you by phone.

Credit freezes come with a PIN; keep it locked away somewhere, says Sonya Smith-Valentine, CPA and president of Financially Fierce in Washington, D.C. “This way the teen can't go and unfreeze their credit reports and apply for more credit,” she notes.

“I have worked hundreds of cases involving teens who have been victimized by ID theft, and when the worst happens, the first thing that they say is, 'I only wish I would have known.'”
–Alexis Moore, cybercrime expert

3. Know where your kid's data goes. “Make sure you know which school administrators, which coaches and which organizers have access to your child's personal information,” explains Hunter. Ask the school for its policy on privacy protection, he says.

Financial expert Harrine Freeman suggests that you ask if you can have your child's information opted out of the data records that many of these organizations keep.

4. Lock down information sharing. Given that parents are forever filling out information-packed forms for schools, clubs, day care, sports teams, extracurricular activities and doctors, it's no wonder that kids' identities are particularly vulnerable. “Social Security numbers are the most commonly used piece of information by identity thieves targeting children,” the Identity Theft Assistance Center found.

The endless forms aren't the only culprit. “Make sure your teenagers aren't sharing their Social Security number online. Only allow them to share personal information with secure sites. And most importantly, make sure they understand the consequences of having their identity stolen,” Hunter says. Dr. Coleen Pantalone, a finance professor at Northeastern University, says to tell your teens to memorize their Social Security number instead of carrying the card.

5. Keep an eye on the phone and the mail. If your child starts receiving preapproved credit card offers, calls from bill collectors, letters saying she has been turned down for government benefits that she hasn't applied for or notices from the IRS saying she didn't pay income taxes, your teen may have been hit, the Federal Trade Commission says. Also request your child's annual Social Security earnings record, which can alert you if someone uses your child's Social Security number to get a job, Freeman advises. Request a report at the Social Security Administration.

Having a discussion with your teen about the importance of responsible adult behavior may be agonizing, but more agonizing will be dealing with the consequences of identity theft. ID theft among minors took 334 days to detect and 44 hours to resolve, and 17 percent of children were victimized for a year or longer, the Identity Theft Assistance Center found. “These statistics indicate that child identity fraud is both more difficult to detect, and more difficult to resolve, than adult identity fraud,” it said in its study.

You may catch a little eye rolling if you're trying to convince a know-it-all teenager that you're trying to do what's best, but keep the goal in mind. “I have worked hundreds of cases involving teens who have been victimized by ID theft, and when the worst happens, the first thing that they say is, 'I only wish I would have known,'” Moore said.