Using Your Children's Information to Establish Credit

How does you having a credit card "make them money"?

How do you use a minor's SS# to obtain a credit card legally?

The answer to both questions is: Impossible.

Report this dolt.

That sounds an awful lot like credit card fraud and identity theft to me. And highly illegal. Like, Federally criminal acts.

They have from 18 on to establish their own credit history. I don't see how he would be 'making them money' is this manner either... If I heard this in a seminar I would dismiss everything else this speaker had to say.

No. Absolutely not. No way.

That is what is called identity theft. The ONLY person who can legally open a credit card in your name is YOU.

Please report this dude.

Edited to add: Adding a child as an authorized user of a credit card established in YOUR name is ENTIRELY different than opening a credit card in a child's name. Doing the first is legal, doing the second (especially if you are actually USING the credit card to buy stuff) is HIGHLY illegal as well as morally wrong.

No, it's ILLEGAL. What an idiot. Report the guy, and tell whoever booked this speaker to not hire him again.

No, that would be fraud. The speaker was giving you some very bad information. Establishing credit in your child's name for your own use is fraud and could result in criminal prosecution. Trying to establish a credit history for a young child is a bad idea.

Please REPORT THIS SPEAKER to any and all authorities -- the cops, the fraud squad, the banks. What he told you to do is illegal and even if you're not caught it's just stupid too. Once a child has a credit card, that child's name will end up on a million mailing lists and is out there in the world as a name with credit attached to it -- making it much, much likelier that the child's name could be stolen or otherwise used fradulently. That would ruin the child's name for credit purposes and the child would have to fight hard as an adult to get his or her good credit back. This does not help them -- it only hurts them. Report this fraudster immediately. I hope this was a free seminar because if you paid for it -- you were ripped off!

For some reason I am thinking I heard of parents being prosecuted for doing this, so not only is it unethical, it may be illegal.

While this doesn't address your question per se, it does stress the importance of NOT creating a credit report for a child under 18:
http://today.msnbc.msn.com/id/42997608/ns/today-parenting...

Is that even legal? Sounds like a terrible idea to me!

Illegal, illegal, illegal.

While you CAN check your child's credit report to ensure that no credit has been taken out for them by an identity thief, actually taking out credit for them in their name IS IDENTITY FRAUD and punishable under federal law.

It is absolutely not okay to establish credit under your child's name for your own use. Do NOT do this.

This sounds very illegal to me. As Angi C. said, the only person who can open an account in their name is the person them self. A 3you can't even sign his name and that is required when opening an account. Also, who would grant credit to a child who has no income? So, he would have to give a phony DOB and a phony job. How would having a credit history make them money? I wonder if you misunderstood him.

I believe this is called identity theft.

I have heard though that parents should check to see if the kids have a credit history as minors. They should not and can have their identity stolen and trashed before they start college, preventing them from qualifing for student loans or grants.

When I was at Penney's 2004-2008, we were not allowed to take a credit/debit card unless it was in the customer's name, not in a spouse's name. Thought was that even though they could prove they had been married this person at one time they may not be married now. And children were not allowed to use a parent's credit card, because you could never be sure if they really had permission.

No one can get credit under the age of 18 it is simply illegal. So what you are proposing is fraud and more than likely the destruction of a child's credit before they are of age to even use credit.

So to answer your question, no! it is not okay!

no, but that being said (and the laws may have changed) the best thing my dad did for me was as follows....

When I was 16 yrs old my dad put my name on one of HIS credit cards and then i took that card with my name (using the credit the credit he built up over the years) and I applied for my own credit card (express clothing store) using his credit history (needless to say by line of credit was very high for a 16 yr old - luckily i was mature enough not to max it out).

I was very lucky to start my credit history as a teen :)

I would never do that! It's fraud and identity theft.

It is absolute not okay. It's illegal. It's identity theft.

I have a friend who, after ruining all her own credit and reputation with service providers, began putting all her bills into one child's name...and then after not paying all of those bills, transferred everything into the other child's name. I feel really sorry for these girls...what are they going to do when THEY get to be adults, and want utilities? They'd have to sue their own mother!

Totally unethical in my book. I know a few people who did this when they were really needing money and horrifically ruined their kids' credit before they were of age to even establish it themselves. I don't think its a good thing at all.

I agree with RevRuby and think it's shady at best. I also know of instances where parents took out credit cards on their kids and ran them up and walked away from the debt, strangling the kids' credit later on, including when they try to get into college.

Bad stuff. I would not appreciate a seminar on this.

Dawn

I know a lot of city kids with debit accounts (diff but helps a bit). They're needed for school lunches, taxis, etc. typically they have low balances (on purpose). I know very few families that open true credit cards for their kids. Again... The purpose is to establish credit. The handful of people I know whose young children have credit accounts are lawyers, financial types, an economics professor, and trust fund babies.

Oh. Also child actors and models. But those accts are old news.

In nearly all cases, the parents are signatories on the accounts. Its all open & above board. But the tiny minority (is my understanding)

FAR more people, though, open accounts in their kids names because they have destroyed their own credit. Usually addicts & alcoholics.. Who also open (and burn) utilities accounts, rental / leases, etc.

So... In the first case? Kudos.
In the second case? Fraud.

Run to the nearest exit. This is not legal. A child cannot read, write or understand a legal document.

This reminds me of the parents of child actors many years back where the parents took the child's money and spent it so when the child was of age he/she was broke.

Don't do it and do get involved. This is a scam. I sure hope you didn't spend any money to attend the seminar and if you did I hope it was a small amount.

If it sounds too good to be true it is not.

The other S.

That is ridiculous. They can establish their own credit when they are of age.
Not sure how this could possibly make money for them when they are older. Sounds fraudulent!

It's wrong to do this. Even with the best intentions, if something happens and you aren't able to make good you have now blemished their credit histories. Not to mention companies are not allowed to issue credit in minor's names because they are not able to enter into a binding contract. In fact, that is why I had to sign onto my son's checking account (that he opened when he started working) because he was not old enough to be legally responsible if he overdrew the account.

I do know a of girl that was in foster care and as she was turning 18 she found she had horrible credit because her real mother had used her name and social for various things (utilities etc.) because she couldn't get them in her own name.

If my parents had tried to establish credit in my name when I was little, I would be more screwed than I am now!! My little sister needed a $200,000 surgery that left them bankrupt and they never recovered. Bad, bad, bad idea!!! Unless you're a billionaire...

He could add them as authorized users/cardholders on one of his accounts and that will start their credit history. I am a cardholder on my dad's American Express account and my credit reports show that I have had a credit card in good standing since 1983, which is the year I was born. I've only had the card since 2000.

Credit scores are calculated by a formula, so that long history definitely helps my score. Other credit cards I have give me a lower interest rate and higher credit limits. I also qualified for a low interest rate on my mortgage. Having that long history hasn't made me money, but it sure has saved me money!

Now, if he is running up debt in their name, obviously that's horrible. But if you use credit responsibly, like paying off the cards every month, he has a valid point that their credit history will benefit.

I believe that is identity fraud because I don't think they can buy anything under a certain age. And they aren't old enough to buy things. He's using their cards to purchase stuff he wants. And if he doesn't pay the bills on time, he will RUIN their credit before they're old enough to actually want it. I don't know who you would call to report this man, but I would.

I think that's really pushing the boundaries of what is OK. I would never do that. There are more ethical and, umm, LEGAL ways of establishing credit for your children. If you have a good credit history, simply adding your child to your credit accounts causes them to assume your credit standings.

I thought it was illegal to use information fraudulently. But maybe that's just if the credit goes bad and you ruin their credit. A child cannot establish credit, so the use of the credit by the parent would be fraudulent, I thought.

No and I also believe it's illegal. Some people do that because they have ruined their own credit. I came into contact with a man whose father used his name for credit and when this guy turned 18, he had the worst credit ever. It took him forever to get that stuff off his credit report.

I can honestly say that it used to be common for folks who got their stuff cut off in their own name to go and get it turned back on using their kids ss#'s and then using it up then switching to a different kids number and name. They were committing fraud.

It is more common today for the company to know that number is not an adult. So I don't think it is as common to do today. Plus stuff follows you around too much now that life is on computers.

If something happened and one lost their job and could not pay their bills then the kids credit would be ruined. All they would have to do is show their birth certificate and say they weren't legally old enough to enter into a contract with any company at the time a past due bill was made then get companies going to find out who did identity theft to these kids. So it's not worth it.

College is the perfect time for kids to get their first credit card and start building it.

I got my first credit card at 16. I have excellent credit (880 or so). There is no need to start it so early. In fact, my hubby never had a credit card until about 11 years ago --when he moved here from Ireland. He has excellent credit (850 or so).

My mom would get me kid magazines or something with my name on it when I was younger. I remember a time where (I was stupid to even do this) I was going to co-sign for a truck for my ex the salesman came up to me and asked if I knew I had credit going back to me being very young. Needless to say I had no idea. I would do something like for my son but I'll be very careful and cautious if I do, do it.

That speaker obviously has no "moral compass" and he should not be in a position to give financial advice. This has fraud written all over it. Somebody obviously had to "sign" the application and use of the cards, I would say that is forgery as well.