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There are a couple reasons a person under age 18 may have a credit report. One is positive; the other is problematic.
To know whether your child already has a credit report, you can easily check with the credit bureaus (more on that below). If he or she does, you'll want to make sure that the file contains only accurate and beneficial information. In the event that you spot errors, you may be able to do something about it before it negatively impacts your tot's or teen's life.
How to Find Out Whether Your Child Has a Credit Report
Unless you've taken action to help your young child develop a credit history, he or she most likely doesn't have a credit report. These reports begin when a person applies for and receives credit products, such as loans and credit cards. Once that happens, the lender sends information about the activity to the three major credit bureaus (Experian, TransUnion and Equifax). At that stage, a credit report is born.
Minors can't sign a loan or credit card contract, but they can become authorized users on their parents' credit card accounts. If you add your child to your account as an authorized user, a credit report will be generated in his or her name. In most cases the issuer will send information about the account to all the cardholders' reports, no matter their ages. As long as you pay the bills on time and don't carry big balances, it can be a savvy technique to jump-start a minor's credit history.
The other reason your child could have a credit report is as a result of identity theft. If someone else used your child's name and Social Security number to open accounts, they will have a credit file—and odds are it won't be listing attractive information. Typically thieves borrow money and don't repay, so the accounts go delinquent. Late payments will be posted to your child's credit report, and when the lender still doesn't get paid, it will refer the debt to collections, which will also show up on your child's reports.
Good or bad, it's time to see what's going on by checking your minor child's credit reports. Gather the following:
- A copy of your driver's license or other government-issued identification card
- Proof of your address, such as a utility bill or an insurance statement
- A copy of your child's birth certificate
- A copy of your child's Social Security card
Write to each of the credit bureaus and request your child's credit report. Specify his or her full name, date of birth and address for the past two years. For an Experian report, you'll need to complete an identification form and include it with the items above. If you're concerned about sending information by mail, you can upload your information online.
In the event that no credit report has been created for your child, Experian will send a notice letting you know. If there is, one will be provided to you.
Warning Signs of Child Identity Theft
It can take a lot of time before identity theft is detected, and by the time it is, your child's report may be riddled with fraudulent and past-due debts. Pay attention to the common warning signs of child identity theft:
- Credit card statements or bills addressed to your child
- Collection notices listing your child as the debtor
- Calls to your home from collection agencies, asking for your child
- An increased amount of mail addressed to your child from mysterious companies
- An inaccurate medical bill or statement of benefits associated with your child's name
- A notice that your child owes back income tax
- Preapproved credit offers in your child's name
Watch out for these red flags. Some may be waving before any wrongful account shows up on your child's credit reports.
What to Do if Your Child Has a Credit Report
If your child has a credit report containing only accurate information, you don't have to do anything. Let the positivity build!
On the other hand, if your child's credit report comes back with evidence of fraud, take action:
- Contact the credit reporting bureaus. File a dispute. Include supporting documentation, and be clear that your child is a minor. Send a completed copy of the Federal Trade Commission's (FTC) Uniform Minor's Status Declaration Form. Ask the bureau to remove all inquiries, accounts and collection agency notices from your child's credit report.
- Report the crime. You may file a police report, either over the phone or at your local station. Another way you can report the fraud is through IdentityTheft.gov, which takes the place of a police report. Your report will go directly to the FTC.
- Freeze your child's credit file. Whether you spot proof of fraud or not, you can have your child's credit report locked down with a credit freeze. Once in place, it prevents potential lenders from accessing a credit report, so it should prevent a crook from opening an account in your child's name.
Although discovering that your child has been a victim of identity theft is scary and upsetting, clearing it up shouldn't take long. After all, it's hard to argue with a date of birth. To know whether fraudsters have already used your child's Social Security number, consider using Experian's Child ID Scan. This free, one-time service will find out whether your child's number is associated with an Experian credit file, and will help you with resolution.
And if you've chosen to give your child the gift of excellent credit data by sharing your credit card, wonderful. Just keep an eye on your child's credit report to ensure that the account is always being listed accurately and nothing amiss appears. Then when your child is no longer a minor and the report can be released, the history of that account will shine brightly.