|

Methods for Locking Your Child’s Credit Report

ByWallstreet Observer

Quick answer

  • Locking your child’s credit report is a proactive step to prevent identity theft and fraud.
  • You can freeze credit at each of the three major credit bureaus: Equifax, Experian, and TransUnion.
  • Freezing is generally free for consumers.
  • You’ll need to verify your identity and your child’s identity to place a freeze.
  • A freeze can be temporarily lifted if your child needs to open a credit account in the future.
  • This is different from a credit lock, though both offer protection.

What to check first (before you act)

Before you decide to lock or freeze your child’s credit, it’s wise to understand the current landscape of their credit. While children under 18 typically don’t have credit in their own name, their Social Security Number (SSN) can still be a target for identity thieves.

Is there existing credit activity?

Check if any credit accounts have been opened fraudulently in your child’s name. This can sometimes happen if their SSN has been compromised. You can do this by requesting a credit report for your child from each of the three major credit bureaus.

What is the potential impact on future credit?

Understand that locking or freezing credit will prevent anyone, including your child, from opening new credit accounts using their SSN. This is the intended purpose, but it means that if your child needs to establish credit later, you will need to temporarily lift the freeze.

What is the time horizon for needing credit?

Consider when your child might realistically need to establish credit. This could be for a student loan, a car loan, or even a cell phone plan in their own name. If they are many years away from needing credit, a freeze offers robust protection. If they are closer, you might weigh the pros and cons more carefully.

Step-by-step (how to lock my child’s credit)

The primary method for protecting your child’s credit is by placing a credit freeze (also known as a security freeze) with each of the three major credit bureaus. While the term “lock” is often used colloquially, a freeze is the official mechanism.

1. Gather Necessary Documents:

  • What to do: Collect documents to prove your identity and your child’s identity, as well as proof of your relationship. This typically includes your driver’s license or state ID, your child’s birth certificate, and a recent utility bill or bank statement showing your address.
  • What “good” looks like: Having all required documents readily available makes the process smoother and faster.
  • Common mistake: Not having all documents prepared in advance, leading to delays and multiple attempts.
  • How to avoid: Visit the credit bureau websites beforehand to see their exact requirements.

2. Contact Equifax:

  • What to do: Visit the Equifax website or call their consumer services line to request a security freeze for your child. You will need to provide the gathered documentation.
  • What “good” looks like: Successfully submitting your request and receiving confirmation.
  • Common mistake: Going to the wrong section of the website or providing incomplete information.
  • How to avoid: Look for sections specifically labeled “Security Freeze” or “Credit Freeze” for minors.

3. Contact Experian:

  • What to do: Repeat the process with Experian. Their website or customer service line will guide you through placing a freeze on your child’s credit file.
  • What “good” looks like: Receiving confirmation from Experian that the freeze is in place.
  • Common mistake: Assuming the freeze with one bureau automatically applies to others.
  • How to avoid: Treat each bureau as a separate entity and follow their specific procedures.

4. Contact TransUnion:

  • What to do: Complete the security freeze process with TransUnion, again providing the necessary identifying information and documentation.
  • What “good” looks like: Confirmation from TransUnion that the freeze is active.
  • Common mistake: Skipping one of the bureaus, leaving a gap in protection.
  • How to avoid: Make a checklist and tick off each bureau as you complete the freeze.

5. Receive Confirmation and PINs:

  • What to do: After each freeze is processed, you should receive confirmation, often by mail, which will include a Personal Identification Number (PIN) or password.
  • What “good” looks like: Securely storing these PINs in a safe place.
  • Common mistake: Losing the PIN, which is essential for lifting the freeze later.
  • How to avoid: Store PINs digitally with strong passwords and backups, or in a secure physical location.

6. Understand the Freeze:

  • What to do: Familiarize yourself with what a credit freeze means for your child’s future. It prevents new credit accounts from being opened.
  • What “good” looks like: Knowing that your child’s SSN is protected from unauthorized credit applications.
  • Common mistake: Forgetting that the freeze is active when your child actually needs to establish credit.
  • How to avoid: Mark a reminder on your calendar for a few years before your child might need credit.

7. Temporary Unfreezing Process:

  • What to do: If your child needs to open a credit account, you (or they, once of age) will need to temporarily lift the freeze with each bureau. This usually requires using the PIN and verifying identity.
  • What “good” looks like: Being able to lift the freeze for a specific period or for a specific creditor.
  • Common mistake: Not knowing how to unfreeze, causing delays when credit is needed.
  • How to avoid: Review the unfreezing instructions from each bureau when you initially set up the freeze.

8. Periodic Review:

  • What to do: Consider periodically checking if any fraudulent activity has occurred despite the freeze, especially if you suspect a data breach involving your child’s information.
  • What “good” looks like: Peace of mind knowing you’re monitoring the situation.
  • Common mistake: Assuming the freeze is foolproof and never checking again.
  • How to avoid: Set a reminder to check your child’s credit file (or lack thereof) annually.

What affects your score (plain language)

While your child likely doesn’t have a credit score yet, understanding these factors is crucial for when they do. A credit freeze prevents new activity, but these elements are what build and impact scores.

  • Payment History: Paying bills on time is the most significant factor. Late payments can severely damage a score.
  • Credit Utilization Ratio: This is the amount of credit you’re using compared to your total available credit. Keeping this low (ideally below 30%) is beneficial.
  • Length of Credit History: The longer you’ve had credit accounts open and in good standing, the better.
  • Credit Mix: Having a variety of credit types (e.g., credit cards, installment loans) can be positive, but it’s not as critical as other factors.
  • New Credit: Opening many new accounts in a short period can temporarily lower your score.
  • Public Records: Bankruptcies or tax liens can significantly harm your credit score.
  • Identity Theft: If someone uses your child’s SSN to open fraudulent accounts, this activity will appear on their credit report and negatively impact their score if not addressed.

What NOT to do while improving credit: Avoid closing old, unused credit cards. They can help with your credit utilization ratio and length of credit history. Also, resist the urge to apply for multiple credit cards or loans simultaneously, as this can signal risk to lenders.

Common mistakes (and what happens if you ignore them)

| Mistake | What it causes | Fix

Similar Posts