If you haven’t been the victim of identity theft, you probably know someone who was. But has it ever occurred to you that your children could have their identity stolen too? It happens. A lot. And it’s especially nasty because it might take years to discover–who bothers to check a 2-year old’s credit rating?

Over 9 million Americans–including more than 500,000 children–have their identities stolen every year. You might be tempted to say, “Big deal.” But that would be a mistake. A young child’s lily white credit report makes it especially attractive to thieves, who can use the child’d identity to apply for jobs, get credit cards, open utility accounts (gas, electric, garbage), get a driver’s license, and more.

Sadly, it’s not always strangers who are stealing our kids’ identities. Sometimes it’s a parent. It typically happens when a parent has been laid off or is having financial difficulties and decides to use a child’s identity to apply for more credit cards. The intent, of course, is to pay it all back. But that doesn’t always happen. The result? Now the child has a miserable credit score–just like mom and dad.

How bad can it be? Really bad. Really, really bad. And the consequences can stick around for decades. According to credit giant Experian, If your child’s identity is stolen, he or she might have:

  • Difficulty getting accepted into college
  • Difficulty opening a savings account
  • Difficulty applying for a driver’s license
  • Inability to secure a job
  • Getting collection notices in the child’s name
  • Lost and damaged credit
  • Having arrest warrants in your child’s name

So how can you tell? Here are some red flags:

  • Lost of pre-approved credit card applications showing up in your child’s name
  • Bills addressed to your child
  • Calls from collections agencies
  • A report from the Social Security Administration showing that your two year old has been working for 5 years
  • A cop showing up at your door to arrest your third grader for fraud

Bottom line: no matter how old your child is, take advantage of the one free credit report you get from each of the credit bureaus. If it’s not blank, you could have a problem. You can also check with the Social Security Administration to see whether anyone is using your child’s SSN.

As far as I’m concerned, credit agencies are pretty close to the evil empire. But Experian produced a report that is surprisingly informative and helpful. Click here to get a pdf.