Should You Lock or Freeze Your Child’s Credit File?

As a parent, you're probably accustomed to protecting your child against a wide spectrum of dangers, from making sure a car seat is properly installed to checking food labels for unhealthy additives. But have you considered the damage an identity thief can cause—and taken steps to offset it?

If someone steals your child's personal information, serious credit and financial problems can ensue. Thankfully you can put a crimp in a crook's plans by locking your child's credit report up tight. And it's less time-consuming than you may think.

How Child Identity Theft Happens

Identity theft typically happens when a person uses someone else's name, Social Security number (SSN) or other personal information to commit fraud. When a child is the victim, it is usually related to their SSN. Often the theft remains undetected for years, only to be unearthed when they grow up and check their reports or start applying for credit.

"Child identity theft is usually a form of synthetic identity theft, which is when a thief uses a combination of true and fictional credentials to start and use accounts," says Eva Velasquez, president and CEO of the Identity Theft Resource Center. With your child's real SSN, the thief creates a fake identity, which is often used to open new credit cards or loans. The thief will rack up debt and not pay, which is then recorded on the reports associated with the the SSN—your child's.

According to Velasquez, there are a couple ways thieves might overtake your child's SSN. Some invent the numbers, and when the Social Security Administration issues the same one to your child at birth, the number is already tainted. Another method is when someone you know has or had access to it; it could be another parent (usually in a divorce situation), a relative or family friend.

Children in the foster care system are especially vulnerable to identity theft. "It's rather common for these kids to be passed around from one person to the next," says Velasquez. "Their odds of being an identity theft victim are much higher than the general population."

Lock Your Child's Credit

One of the easiest ways to prevent a thief from opening credit cards and loans in a child's name is to lock his or her credit file. The major credit reporting agencies (Experian, TransUnion and Equifax) offer this tool. When it's in effect, a lender can't check that credit file, so they wouldn't be able to issue a credit card or loan in your child's name.

Locking your child's credit file is simple, and each credit reporting agency has its own version with different sets of benefits. You can use Experian CreditLock, for example, when you sign up for the CreditWorksSM Premium program or the IdentityWorksSM Plus Family Plan, which includes such features as dark web and social media monitoring.

Whichever program you choose, you can lock up your child's credit report in minutes online. Once done, you'll receive a real-time alert when a fraudster attempts to apply for credit in your child's name. Unlocking the file is also fast, and can be done on your computer, phone or tablet.

How Locking Is Different From Freezing

Another way to block a thief from opening credit cards and loans with your child's identity is to add a security freeze to your child's credit file.

Credit freezing is a legally sanctioned process that also prevents creditors from viewing a credit report. There are a few differences to be aware of, though. Unlike a lock, which starts as soon as you enroll, a credit freeze can take up to five business days to go into effect. To thaw a credit freeze, you'll have to use a password-protected account or a PIN (personal identification number), which can take time.

Talk to Your Child About Credit Reports

Discussing identity theft and credit reports with your child is important. "It's part of good identity hygiene," says Velasquez. "You have to educate your kids early."

Here are some ways to get started:

  • Review what credit and reports are, and why you want your child's identity to be protected against thieves.
  • Warn your child against sharing or exposing personal identification data, and encourage them to inform you if they suspect a problem.
  • If you've locked or frozen your child's credit reports, explain why you did so and what it means.
  • When your child is nearing 18 years old, prepare them to assume control. Show how to thaw or unlock the file.
  • Teach wise credit monitoring habits and identity theft protection techniques.

Finally, it's always a good idea to consider all potential problems that could arise when you've locked or frozen a credit report. You don't want to prevent access when your child needs it, so if he or she is too young to have autonomy, keep a record of passwords and PINs for your chosen custodian to provide in the event you are not there to provide them. With this kind of preparation, you can be sure you've done everything possible to safeguard your child against a myriad of dangers.