Your Child’s Most Important Asset

Unless your kid was born with a silver spoon in his mouth, he probably doesn’t own a lot of property. But he owns an intangible asset that is very valuable to criminals. What is it?

It’s his Social Security Number (SSN).

The Tax Reform Act of 1986 required every dependent over age four and listed on a tax return to have a SSN. The next year, the Social Security Administration (SSA) developed a program allowing parents to apply for a SSN at the hospital right after birth.

You don’t have to apply for a SSN at the hospital, but if you wait, you’ll have to provide proof of US citizenship and age for SSA to crosscheck with the issuing office, which could take up to 12 weeks. Children age 12+ must appear in person at a Social Security office to be interviewed in order to have a number assigned to them.

Needless to say, most new parents are happy to check a box at the hospital and get it over with. Why does this matter? Children’s SSNs may easily lay dormant until your child applies for a loan, job, or to rent an apartment. According to the Identity Theft Resource Center, kids are 51 times more likely to be the target of identity (ID) theft than adults. While you’ll need your child’s SSN to open an investment account and for tax filing, you probably haven’t considered the need to check his credit.

This lack of urgency opens up your child to ID theft at a very early age. A pristine SSN, especially one that will be invisible to creditors for several years, is a very valuable commodity for an ID thief. Your child’s SSN can be used by identity thieves to apply for government benefits, open bank and credit card accounts, apply for a loan or utility service, or rent a place to live.

Some warning signs that your child’s SSN has been used are:

  1. Being turned down for government benefits because the SSN is already in use;
  2. Getting a notice from the IRS that your child’s SSN was already used; and
  3. Receiving collection calls or bills for things you didn’t purchase.

Here are the steps you should take to protect your child’s credit:

  1. Contact each of the three nationwide credit reporting companies.
  2. Ask for a manual search of your child’s file. The above companies may request such information as a birth certificate, Social Security card, and proof of address.
  3. Keep a record of the calls or letters you sent.
  4. Consider freezing your child’s credit.
  5. If you decide not to freeze your child’s credit, check her credit again just before she turns 16. This will give you time to correct it before she applies for a job or car loan.

Today, schools, doctors’ offices, and other agencies ask for your child’s SSN as a matter of policy. How can you be sure this information is protected? Don’t share your child’s Social Security number unless you know and trust the other party. Ask why it’s necessary and how it will be protected. Ask if they will accept a different identifier, or use only the last four SSN digits.

Your child shouldn’t have to start her adult life with a compromised credit record! Proactivity and a few minutes of your time can save hours of work and headaches later.

 

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