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Children should not have to worry about damage to their credit or theft of their identity, but unfortunately they do, and parents should take certain steps to prevent this from happening.
In some states, parents will have to wait for the launch of a new federal law on Sept. 21 if they want to freeze free credit records of a child under 16 years old. In South Carolina, parents already have the right to do so, under the law, and I will explain how it works.
Here's why it's important: kids are considered particularly vulnerable to identity theft because they usually have social security numbers, but it's unlikely that they'll have a credit report. Thus, no one can quickly know if a child's social security number has been used to obtain credits or government benefits under a false identity.
The substantive part of the new law on economic growth, regulatory lightening and consumer protection explains that "if a fraudster is able to obtain personal identification information, he can "steal" his identity, using it to obtain unintentional credit. The unpaid debt would then appear on the consumer's credit file, rendering it unsuitable for credit and could result in a denial of credit or other negative consequences. "
"In September 2017, Equifax announced a security breach in which sensitive information of an estimated 145.5 million US consumers was potentially compromised, which underscored the importance of this problem" continues the statement.
These concerns are not new, but with each massive data breach, these concerns have increased.
This may seem sadly familiar to the residents of Palmetto State, who faced the 2012 data breach at the BC Ministry of Revenue, when information about 6 million taxpayers and load have been compromised. Residents of South Carolina have been eligible to monitor state-sponsored identity protection since then, and are still in effect until October 31st.
Last year, the offense committed by credit company Equifax compromised the information of nearly half of South Carolina residents, the company told state officials. There is some irony here because Equifax is one of the companies that I suggest to parents to contact.
What parents can do – it's free for residents of South Carolina and will soon be nationwide – is to contact Equifax and the other two major credit bureaus and freeze the records of credit of their minor children.
A credit freeze limits access to a credit file and is intended to prevent this information from being used to open new accounts or perpetuate fraud. Some companies are trying to sell surveillance services to people asking for a credit freeze, but the freeze on credit alone is free.
A credit freeze stays in place until it is up (to apply for a credit card or a loan, for example). For a child, a parent can lift the credit freeze or the child can do it from the age of 16.
And how can you freeze a credit report for a child who may not have a credit report? The new law requires consumer information agencies to create one so that it can be frozen if a freeze is requested.
The law also extends the duration of initial fraud alerts from 90 days to one year. A fraud alert on your credit report "will tell any company that manages your credit that it should check with you before opening a new account," says the Federal Trade Commission.
Any adult can freeze their own credit reports. This comes with advantages and disadvantages. This is a good protection against fraud and theft of identity. The disadvantage is that you usually can not apply for loans or credit cards or any other item requiring a credit report, such as renting an apartment, until you ask that the security freeze is lifted.
reach David Slade 843-937-5552. Follow him on Twitter @ SDladeNews.
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