Having a baby is wonderful news, but it can also be a scary thing. Not only are you entirely responsible for your child’s welfare, but it is also your duty as a parent to make sure that your child is protected in every way possible - this includes protecting your child’s credit. Identity thieves often target children because a child’s credit is unmarred (or doesn’t really exist at all).
While you may think that the government protects children against such types of theft, this isn’t the case.
State Level Only
The only federal law created to protect a child’s credit identity is the ‘Protect Children from Identity Theft Act,’ (created in 2015) which isn’t a law at all. In fact, there’s a less than 2% chance that this law will pass according to various sources. The law would allow parents to create a credit report for a child and then freeze that report to prevent identity theft. However, the law hasn’t been signed by the President, and it doesn’t look like it will even reach his desk.
This has prompted various states to create similar laws at the state level, though not all states allow parents to create a credit report and freeze it. This is an important point. Recent media coverage of credit report freezing often leads people to believe that all states allow parents to create a credit report and then freeze it, but this isn’t true. Some states do not allow the creation and freezing of a credit report at all.
The States That Allow a Freeze Legally
There are only a handful of states that allow parents to create a credit report for a minor and then freeze that report. The states are Arizona, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Michigan, Montana, Nebraska, New York, North Carolina, Oregon, South Carolina, Tennessee, Texas, Utah, Virginia, and Wisconsin. Other states only allow a parent to go through this process if a child is under the age of 16 (this is often not helpful since identity theft happens to children much younger than 16).
Help from Credit Bureaus
Some credit bureaus have taken matters into their owns hands. Equifax, for example, will allow parents of minors (regardless of the state that they live in) to create and freeze a credit report. Trans Union allows parents to check to see if any credit fraud has occurred, and also allows parents to create and freeze a credit report if they reside in the aforementioned states. Some credit bureaus in states that do not have any laws to deal with credit identity theft of a minor allow parents to create and freeze credit reports for a small fee - however, if a parent can prove fraud, that fee might be waived.
But how easy is it to prove fraud? It’s trickier than you may think - which is why identity thieves often prey upon minors. There’s also a different matter at hand: if you want to build up your child’s credit, how can you do so without attracting credit thieves?
There are so many different facets of this problem that we’ve decided to split this topic into various blog posts - stay tuned to this blog for more information on how you can protect your child’s credit identity. This is not something you will want to miss!