Most adults are fully aware they have a credit history that can make or break their financial stability if they don't make the effort to repair their credit.
However, not all of these adults with young children realize their minor child may also have a credit history.
Anyone who is on record and is having data being reported to the credit history bureaus about their finances needs to not only be aware, they also need to be on top of their credit situation.
Understanding a Minor's Credit History A minor may have an established history of credit for several reasons.
Often parents will include a child as an authorized user on credit cards, usually to teach financial lessons.
Others do it out of convenience to make it easier for a child to access money.
Credit cards are no longer available directly to those under the age of 21 without parental cosigners.
If parents do opt to back up a child on a credit card of their own then the minor will have an active credit history and credit score.
Those under the age of 21 can also apply for their own credit card provided they can prove reasonability to pay back balances due through their earned income resources.
These changes were put into effect under the CARD Act which was established to help reduce the amount of debt young teens were racking up.
Another reason a minor may have an established credit report is due to identity theft incidents.
Criminals use many resources to gain access to other people's credit.
Your child's data may be available somewhere, giving thieves access to names, addresses, and Social Security numbers.
Usually good thieves only need limited information to steal a person's identity.
In this case, there may be credit cards or other accounts opened under part of your child's information that still is reported back to the credit reporting bureaus.
A third reason why a minor may have an established credit report may be even more sinister than regular identity theft.
Oftentimes criminal activity comes from the child's parents themselves.
Parents who have bad credit of their own and are unable to get services established in their own name will use kid's identification to set up accounts.
If these accounts go unpaid as the parents other accounts have in the past, the child ends up with a bad credit record.
Sadly, many parents have destroyed a kid's credit history before they were even old enough to legally have credit.
How to Get More Information If you suspect your minor child's identity has been hacked or is being used by another family member, you can confirm the presence of existing credit reports by contacting the credit reporting agencies Experian, TransUnion, and Equifax directly on behalf of your minor child.
Legal guardians also have the right to access a minor's credit report.
One of the credit reporting bureaus, Experian, has a policy to not disclose a credit report of a minor to anyone but a parent or guardian to help protect their credit.
Each bureau will have different requirements for securing the minor report but it should be relatively easy to obtain the copy for review.
Minor's credit reports will contain the creditor contact information.
If you are not familiar with the creditor, you can use the contact information to find out how your minor child has an open account.
If the account is not legitimate, parents can pursue further action to prosecute the identity criminal through their local police department.
It is recommended that any consumer, minor or adult, request the annual free copy of their consumer credit report and review it for further identity crimes and inaccurate information that can drop credit scores.
Low credit scores can end up cost you more money over the long-term and can set a minor child on a long road to finding financial stability.