It's Up to You to Protect Your Child's Financial Identity

By Susan Beacham

 Part 1 of 2
 Click HERE for Part 2

Right after each of my girls was born, we applied for social security numbers for them, just as the law required. We had no choice, of course. The Internal Revenue Service requires parents who want to claim a child as a tax deduction to obtain a social security number before the child reaches 1 year old. Unfortunately, in this age of identity theft, I now wonder whether we might have put our girls at risk.

I have filled in their social security numbers on many forms. Should I be concerned?

"Not really," says Linda Foley, founder of the Identity Theft Resource Center. "However, it's wise to keep your eyes open for 'red flags,' like getting a bill in your child's name from a credit card company - when you know you have not opened one - or receiving calls for your child from a collection agency."

According to the Federal Trade Commission, each year roughly 400,000 U.S. children become victims of identity theft. That means someone has obtained their social security number and other personal information and used it for their own financial gain. Two-thirds of the time the thief is a parent or guardian. Other times, it's a total stranger.

Stealing a child's identity to open a credit account, apply for a loan, get a driver's license or rent an apartment can go undetected until the child grows up and needs to do a few of those things herself.

I thought I was doing all I should to protect my girls by keeping their social security numbers, birth certificates and passports in a safe deposit box at the bank. I know now that isn't enough.

Despite the fact that every financial expert in the country says we should never divulge our social security numbers for any reason, I started to think about how many times I have given away my girls' social security numbers. I gave it to the sports program when I signed Allison up for the swim program at the high school. I gave it to their pediatrician, and again when we applied for extra health insurance. When my husband and I thought about all the people who have had access to the girls' social security numbers, the list was long. I started making calls.

The people at the pediatrician's office said they no longer keep patients' social security information on file unless the children have health insurance in their name. For the most part, insurance claims now are processed using only a child's birth date. I got the same news from the high school. While some colleges continue to use students' social security numbers for identification, my girls' school does not. Only parents of children participating in government programs, such as the free lunch program, are required to supply social security numbers.

The last stop in my quest to make sure my children's identity was secure was to go online and see whether either girl had a credit report on file. Not having a credit report on file would mean their financial identity was secure. Getting a credit report would indicate trouble - that someone had applied for credit using their information.

I started by logging on to, a link to all three credit reporting bureaus - Equifax, TransUnion and Experion. I supplied the basic information: name, address and birth date. Then I was asked for the dreaded social security number. As much as I hated to even type the numbers, it was necessary to request a free credit report on each girl.

I did what I could to protect their personal information by checking the box requesting that only the last four digits of their social security numbers be used in any correspondence. That is a relatively new practice designed to help protect the information in case a printout of the report falls into the wrong hands. While it is a good stop-gap measure, the best defense is to shred every document before recycling it.

I was relieved to find that neither of my daughters had a credit history.

Linda Foley would say that I went overboard. While my one-time check was not going to hurt the girls' credit, too many requests like this could artificially start a credit report for them. "Keep alert to 'red flags' and don't check your child's credit unless you see some evidence that their credit has been compromised," Foley advises.

What Parents Should Do

Before anyone gets their hands on your child's financial identity, do the following:

  • Keep your child's social security information and birth certificate locked up in a safe place. Don't carry it in your wallet. If you need access to the information, make sure you store it on a laptop or in a file that is protected from unauthorized access by others.

  • Whenever someone asks for your child's social security number - or your own for that matter - just say "no." If there is no way to avoid providing a social security number - on bank documents, for example - make every effort to have the information encrypted or obscured in some way to keep it private.

  • Don't give your children their social security information until they are old enough to understand how to protect this information.


  • Check out the "red flag" information at (Fact Sheet 120b).

Come back next month for our follow-up look at financial identity issues: how to tell if you have a problem and how to fix it.

Go to Part 2 of this article

Susan Beacham is the founder and CEO of Money Savvy Generation, which provides innovative products and services to help parents and educators teach children money management skills. Email her at