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Topics addressed on August 23, 2006:
Freezing your children’s credit histories
I have two young children (both under the age of four). Because I have heard of even young children being the victims of identity theft, I am considering freezing their credit files until they are old enough to have their first credit cards. What is your opinion on this? Is it possible for a parent to freeze the credit of a minor? Would you do this for your own children?
Your children probably do not yet have credit reports, so you wouldn’t be able to freeze them, and I wouldn’t freeze the reports if they did exist, even for my own children.
There seems to be a growing misperception that everyone is assigned a credit history at birth, just like a Social Security number. In fact, your children won’t have a credit report until they have credit in their names.
Having no credit report is better protection than having a credit report with a freeze. If an identity thief applies for credit using your children’s information, the lender will get a response indicating no credit report exists with those identifiers, and also may receive an alert that the Social Security number belongs to a minor.
A notice that the Social Security number is issued to a minor can tip off the lender to fraud, stop the application and allow the lender to notify law enforcement.
If there were a credit history and it were frozen, the lender would receive only a message that the credit file needed to be thawed by the consumer. The lender would then have to ask the identity thief to thaw the credit file before the application could be processed.
The identity thief could then explain that he or she needed to go get the password and could simply walk out of the bank never to be seen again.
If your children already have credit reports in their names, one of three things has happened. You have applied for credit in their names and the applications were approved. You have added them as authorized users or joint account holders on one or more of your accounts. Or, someone has fraudulently used their information to apply for credit and they are already identity theft victims.
If they become victims, before placing a file freeze on your children’s credit histories you should add victim statements to their reports. Doing so will require filing a police report or other valid identity theft report.
One of the most significant requirements of the The Fair and Accurate Transactions Act (FACT Act), which amended the Fair Credit Reporting Act (FCRA), is that it requires lenders to respond to security alerts and victims statements.
Because of that requirement, the statements provide strong protection for fraud victims while still affording access to credit if they need it.
One of the few instances in which I would recommend freezing a credit history is if the child is very young and is a victim of identity theft. It is an extreme situation that may warrant an extreme action.
Before doing so, check your state laws to verify you can place a file freeze and to determine the requirements for doing so. Some states do not allow credit file freezing. You may need to file a police report regarding the crime. If you do not, there could be a fee for placing the credit freeze.
Thanks for asking.
- The "Ask Experian" team