Parents It’s Not Fair When You Destroy Your Children’s Credit
You just turned 21, you finally hit the age in adulthood where you're ready to move out, get an apartment, and purchase that new vehicle. Each time you go to apply for credit, you've been hit with denials due to adverse credit history. The confusion begins to set in because you know you never opened a line of credit outside of your student loans. Your Credit Report has a list of unpaid utility bills and loans listed since the age of 16. How does something like this happen? CHILD. IDENTITY. THEFT.
Child Identity Theft occurs when a child's sensitive information, such as their social security number is used to open a line of credit. In 2017, over 1 million children were victims of identity fraud, and six in ten child victims personally knew the perpetrator. Family and friends were the most common suspects in child identity theft cases.
This crime can go undetected for years, and the victims often discover the damage when they're older.
Over the past two months, I've caught up with loved ones who've been going through personal financial woes caused by Child Identity Theft. It's impacted their creditworthiness, ability to get an apartment, personal/student loans, and a job. One person was flat out denied a job due to poor credit history. In each of these cases, their parents were the perpetrators.
Why, you ask? Financial desperation. Some of their parents fell on hard times and needed a leg up, so they resulted in what they assumed would be the best source of getting out of a rut, their child's “clean” credit. Others parents were simply opening lines of credit in their child's name for items they never intended to pay back. Not only has their decision to commit child identity theft ruffled the wallets of their children, but, it has put a strain on their personal relationships.
In some cases, recovering from the theft can force a victim to make a difficult decision: choosing between reporting a family member or living with debt and a poor credit score. The victims are literally torn, wanting their names to be cleared and the parents in their lives to take responsibility:
"If you were going to take out something in my name, at least create a plan to ensure it was paid off and would not negatively impact me."
"I asked my mother, when was I suppose to find out… at the point of a credit denial? She didn't have an answer."
"I understand that money was needed, but NOT at the expense of my future."
"I realized I my credit was shot since birth—thanks poverty.
The most disheartening thing I've experienced in hearing these stories is how the victims are trying to recover from the damage. It's a messy start when it comes to their finances! As they try to build generational wealth the burdens they face are another obstacles in the road they WISH did not exist.
So how does a victim move forward? Accountability and Resolution.
Children deserve to be protected from the effects of Child Identity Theft. The culprit who caused the harm needs to be held accountable, even if it means that they are held to the judgement of the victim.
If you've been a victim of child identity theft, check out this link for resources to assist in recovery steps. If you are concerned about potential accounts being opened in your name, you can request a credit freeze from the credit bureau’s Equifax, Experian and TransUnion to restrict access from new credit accounts!
I wish you well in healing!