Have you ever seen a friend take out a light bill in their 6-month old baby’s name? What about your other friend, who goes to get their first credit card and finds out that they have a low credit score, a bad payment history, and $10,000 in debt? Well, while we might be tempted to think that this only happens to “Shanequa nem,” the truth is that jacking up your child’s credit is apparently a growing trend all across America.
It is possible to use your child’s name to get loan, a new credit card, or utilities turned on mainly because your age is not included as part of a credit check. So, that newborn baby of yours could end up owning a brand new car if you are unethical enough to use your child’s name and social security number on the loan application.
Another reason that it’s easy for parents to be tempted to use their children to get things they can’t afford is because you can do pretty much anything to someone if you have their social security number. Yes folks, this is called “identity theft,” and it’s illegal. But the other hurdle in prosecuting such cases is that a) the child doesn’t usually find out they’ve been hurt until they are well into adulthood, and b) who’s going to turn on their mama and report her to the police?
Not only do some parents have a habit of using the identity of their underage children, some even turn to their children for help during adulthood. According to LeaseTrader.com, there has been a 30 percent increase in the number of cases of 21 – 28 year old children co-signing to help their parents buy the things they want or need. “You used to rely on your parents to help you out or co-sign something,” said John Sternal, vice president of marketing and communications at LeaseTrader.com. “Today it’s a little bit of the opposite, since kids often have credit situations that haven’t been tarnished as much as their parents’.”
I argue that much of this trend could be due to the fact that many baby boomers have not been saving and are not even prepared for retirement. In fact, the “late boomer generation,” those born between 1955 and 1964, have a savings rate of only 10 percent (including household wealth), which is far lower than the maximum savings rate of the pre-boomer generation of 30 percent. In other words, our country is addicted to consumption, so a mother stealing her child’s name to get an extra credit card can be compared to a parent with a drug addiction using their child to get another fix.
A college senior in the DC Metro area told CNNMoney.com about how her father took out education loans in her name. She didn’t find out about the loans until she tried to get credit card as an adult. Since that time, her credit has been ruined.
“My credit is really bad now,” she said. “I’ve had to have a co-signer for every apartment I’ve ever had, I can’t get a credit card and getting any other loans or even a car is going to be very hard.”
In some cases, it can be argued that the need to survive may drive a parent to do something they might not otherwise do. Using your child’s name to get access to utilities or much needed cash might be your only path to survival. At the very least, if you do use your child’s name (which I certainly don’t condone), at least have the ethical responsibility to ensure that you pay the bill on time. In fact, using a child’s name to create a solid payment history might actually help him/her in the long-run. Again though, I am not, for one second, condoning identity theft.
This story posted by LeaseTrader.com, the automotive service company that lets people transfer out of their Car Leases early. If you're looking to swap a lease or transfer out of your car lease, please visit www.leasetrader.com