Your credit score and history can affect many things about your future, including your access to rentals, loan availability and even your insurance premiums. When you have credit problems as an adult, you can explore bankruptcy to resolve overwhelming debt and rebuild your credit history. What you may not know as a parent, though, is how important it is to monitor your child's credit. If your child is a victim of identity theft, it can lead to financial problems for many years. In some cases, it can even mean bankruptcy. Here are some tips to help protect your child's credit.
Why Are Kids a Target?
A child's Social Security number is typically free of any criminal history or outstanding accounts. That makes kids an easy target for identity theft. And, since most parents don't watch their children's credit reports, it's often a long time before any theft is uncovered. By the time the problem is identified, the damage has already been done. In some cases, the damage is extensive and can be difficult to repair.
How Can You Protect Your Child's Credit?
Since there aren't any systems that will automatically monitor and protect your child's credit, it's up to you to do it. You'll be the first line of protection until your child is old enough to monitor it on their own. There are a few credit monitoring services that will provide some support, but that shouldn't be the end of it.
Contact every credit bureau once a year to get copies of your child's credit report. If you receive a response that there is no existing file for your child's Social Security number, that's a good thing – it means there are no open credit accounts in your child's name.
What Are the Warning Signs of Identity Theft?
One of the key indicators that your child's identity has been stolen is the sudden receipt of credit offers in the mail. If you're receiving offers for credit cards or personal loans in your child's name, that's a sure sign that someone has opened up a credit card or other account using his or her Social Security number.
Sometimes, your child's credit problems aren't discovered until he or she turns 18 and applies for that first loan. A denied credit application might be the first sign of a problem. When your child applies for a first bank account, that bank account application may reveal outstanding debt as well.
How Can You Fix Your Child's Credit Problems?
The first step to fixing your child's credit problems is to file a police report. You'll need the legal record that his or her identity has been stolen. It also provides you with an incident report number that you can give to the creditors to close out accounts.
Reach out to each of the credit bureaus to place a fraud notice on your child's Social Security number. This prevents the instant approval of any future credit applications. It will require the verification of the applicant's identity before any credit is approved. Keep logs of all of your conversations with the credit bureaus and creditors, and ask for delivery confirmation of any letters.
The more attentive you are to your child's credit scores, the safer his or her financial future will be. By identifying the problem early or preventing it entirely, you might be able to preserve your child's credit for adulthood. Talk with a bankruptcy attorney from a firm like John G Rhyne Attorney At Law if you have any concerns about open credit accounts or outstanding balances that may potentially be a problem. A lawyer can offer advice not only in dealing with bankruptcy but also resolving problems without the need for filing.