A new law requires credit bureaus to offer free credit freezes for adults and children under age 16. Freezing a child’s credit helps protect them from identity theft, including financial aid fraud. Children are an easy target for identity thieves, since it can take years to discover that a child’s identity has been compromised or stolen.
Freezing a child’s credit blocks creditors from accessing the child’s credit report, preventing any fraudulent accounts from being opened in their name.
Why you should freeze your child’s credit
More than one million children experienced identity fraud in 2017, according to a study by Javelin Strategy and Research, resulting in out-of-pocket costs of over $540 million for families. It can take families years to undo the damage caused by identity thieves.
Criminals can access a child’s social security number from stolen tax returns, doctor’s office forms, school registrations or financial documents, either hard copies or online. In 2018, Connecticut Higher Education Trust (CHET) 529 plan owners fell victim to a security breach, leaving personal information of the 529 plan account owners and the beneficiaries vulnerable to criminal activity.
Children are often victims of “synthetic” identity theft, where criminals use a child’s Social Security number combined with a different birth date and home address to create a fraudulent identity. The new identities can rack up thousands of dollars in debt in the form of mortgages, auto loans, student loans, medical bills and more, all of which will all be listed on the child's credit report. Freezing a child’s credit doesn’t prevent personal information from being stolen, but it does stop thieves from opening fraudulent accounts with the child's social security number.
How to freeze your child’s credit
The Economic Growth, Regulatory Relief and Consumer Protection Act allows free credit freezes for all consumers, including protected consumers, such as children under age 16. To freeze a child’s credit, parents must submit required documentation to the three major credit bureaus, Equifax, Experian and TransUnion. Requests to freeze cannot be made online. Credit freeze request instructions can be found on each bureau’s website:
Each bureau requires parents to mail physical copies of:
- A written request to freeze the child’s credit
- Proof of authority to act on behalf of the child - A birth certificate or other document showing proof of parentage, a court order, a lawfully executed and valid power of attorney or written communication certifying that the minor is in a foster care setting
- Proof of identification and proof of the minor’s identification - Social Security number, passport, certified or official copy of a birth certificate or copy of a driver’s license or identification card
Once the request is mailed, it generally takes a couple of weeks to get a response from the bureaus confirming the child’s credit is frozen.
When to unfreeze your child’s credit
The child’s credit will need to be unfrozen before they are able to get a loan or credit account, such as a private student loan for college or their first credit card. Once the child turns 16, they are no longer considered a protected consumer and can manage and unfreeze their own credit. Credit can be thawed permanently, temporarily or for a specific creditor.
TransUnion and Equifax allow users to freeze credit by setting up an online account. To thaw a credit report with Experian, you need to provide the personal identification number (PIN) that was given when the credit was frozen. Parents should keep this PIN in a safe place until the child is ready to unfreeze their credit.
Credit freezes can limit the impact of identity theft, but there are still opportunities for thieves to use a child's information for medical care or to get government benefits. It's important for parents to look out for any signs of fraud, especially anything from the IRS indicating a child owes income taxes or collection notices for services never received.