As an adult, you already know how important maintaining good credit can be.
It can mean the difference between a good interest rate and a bad one, and may even be a deciding factor in whether you get that job you’ve applied for.
But not many adults think to keep watch on their children’s credit. And they should, because more and more, thieves are starting to steal the sterling credit of young children.
Ian Umscheid, like many kids, loves playing baseball, guarding second base.
But unlike other children, the 7-year-old has a lengthy credit report - none of it good. Among the charges: $5,400 on a Bank of America credit card; $2,700 owed to Ally Financial Bank; and $4,500 to a California jewelry store.
Ian is a victim of identity theft.
“At the time it happened, he would have been about 6,” said Simon Umscheid, Ian’s father. “And, they indicated to me that there was about six or seven accounts open, totally about $15,000 in purchases.
The problem began after the family’s California health care provider lost a computer hard disk drive.
A credit monitoring service caught the suspicious purchases, but not before someone had racked up thousands of dollars in charges.
Trying to explain a lost identity to a young child can be difficult.
“He said that someone stole the computer and found my name on it and they made like a card and did my name on it,” Ian Umscheid said.
More than 19,000 children had their identities stolen last year, according to the Federal Trade Commission. Children are often targets because, not surprisingly, they have no history of debt.
“Typically the way that is discovered is the child turns 16-17 and starts to apply for schools or car loans. And thieves know that,” said Steven Toporoff, an attorney with the Federal Trade Commission. “They know if they get a social security number of a youngster, it could be years before parents have any reason to check on the credit of that child.
There are steps parents can take.
“There’s no reason for you to carry your child’s social security number around in your wallet, unless you’re going to need it for a specific purpose. You should monitor your child’s activity online,” said Trey Loughran with Equifax, a credit monitoring service.
Even when parents do everything right, sometimes things happen that’s out of their control.
That was the case with the Umscheids. Simon is a district attorney in California.
“I have been a D.A. for 12 years. I’m a prosecutor. Every day I deal with this issue at work every day,” Simon Umscheid said. “But now it hits home, so that does show that it can happen to anybody and we’re extremely careful.
Tracking and catching identity thieves can be difficult, and the harm they cause can haunt a person for years.
Equifax now offers a family plan to help parents keep tabs on their children’s credit files.
The Social Security Administration is making it harder for thieves to guess Social Security numbers. Instead of being based on where and when someone is born, new numbers are being issued randomly.