Protecting Your Child’s Credit Future
When it comes to credit scores and personal finances, there are several threats that people need to be aware of. There’s the actual financial aspect of credit issues, such as credit cards, debt, loans and more that need to be properly managed to maintain a good score. Then, there’s the aspect of identity theft, a serious issue that was highlighted last fall by the massive Equifax data breach, where about half of all Americans had their confidential information potentially swiped.
Yes, maintaining good credit is about a lot more these days than just forming good financial habits – and if you have children, part of your responsibility is raising them to learn from some of your generation’s mistakes. Among all the other responsibilities that you have as a parent, ensuring that your children have the knowledge to pave the way for a successful financial future is an important one. With that said, here’s a look at some ways you can help protect your child’s credit future, both from a monetary and identity theft standpoint:
Tips for Protecting Your Child’s Credit Future
- Their name: Preventing identity theft arguably starts when you name your child. For instance, while it’s important for some families to follow tradition in naming their kids after their fathers or grandfathers, this can actually potentially implicate them when it comes to credit reporting. For instance, if David Jonathan Jones, Sr., has a negative item on his credit report, there’s a chance that David Jonathan Jones, Jr., may also have that same negative item on his credit report.
- Beware of your online postings: Parents are proud of their kids, which makes sharing photos of them on Facebook, Twitter, Instagram and other social networks somewhat routine online behavior for them. That’s fine, but try to refrain from posting their birth dates, the city they were born in and other information a potential thieve could use to piece together information to steal their identity.
- Freeze their credit: Experian estimates that about 25 percent of all children will have been victims of identity theft before they reach the age of 18. Noting this, consider calling up the credit bureaus and freezing your child’s credit. This ensures that nobody will be able to take out a line of credit in your child’s name unless they go through a rigorous process, which is very difficult for thieves to do. When it’s time to open a line of credit for your child, all you have to do is contact the bureaus and unfreeze it. To freeze their credit, you can go directly to the bureaus websites.
- Discuss responsible money management: Certainly the other big aspect of ensuring a successful financial future for your child is instilling good money management habits. Start early in educating them on this important responsibility, and continue to speak with them about it as they get their first credit card, buy their first car and more. Irresponsibly managing money can lead to negative items on a credit report and significantly decrease their credit score, which can seriously jeopardize the things they’re able to accomplish in life.