Even without a credit card, your child might be the victim of identity theft. Here's how to prevent it, and what to do if your child's identity has already been stolen.

By Rachel Cernansky
Updated January 22, 2013
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Your third grader’s only sources of income are Grandma and the Tooth Fairy. She doesn’t have a clue how to use a credit card. And yet she may be a prime target for identity thieves. One in 10 children had a Social Security number that was used by someone else before she became an adult, according to a recent report by CyLab, a research center at Carnegie Mellon University, in Pittsburgh. Astonishingly, the rate of identity theft among children was 51 times higher than that among adults in the study.

“Children are particularly vulnerable because their information is held in places with little or no cyber security, like schools and doctors’ offices,” says Lisa Schifferle, an attorney for the Federal Trade Commission. And since youths usually don’t apply for anything that entails a credit inquiry, like apartment rentals or loans, they often have no idea that their identity has been stolen until they reach adulthood and discover their alleged credit history. (Contrary to what you may have heard, credit reports are not automatically created when a person is born or turns a certain age.) By then a thief could have racked up debt for years under the victim’s name.

“We are seeing children’s reports with mortgages, auto loans, and numerous credit cards that have been maxed out,” says Scott Morrill, the program manager for the Utah attorney general’s Online Identity Theft Reporting Information System. Worse, he says, “some children technically even have a criminal record because someone else has used their identity when they were arrested.”

To see if your child may have been targeted, contact each of the three main credit-reporting agencies (TransUnion, Experian, and Equifax) to file a child-identity inquiry. If the inquiry results are clean, your little one is in the clear.

If your child does have a credit report with fraudulent information, you’ll need to verify her status as a minor—with a birth certificate, for example—and send each agency a letter asking it to remove every account and collection notice that is associated with her report. Additionally, place a free 90-day fraud alert on her files and order a credit freeze (which will cost up to $10) to prevent any potential creditors from requesting your child’s report while the errors are being corrected. Finally, report the ripoff to the Federal Trade Commission (ftc.gov/complaint) and the local police department. The errors should be erased, Schifferle says, and your child should be free to establish her own credit history down the road.