What Can You Do if Your Parents Trash Your Credit?

Dayton Uttinger

Our parents take on a lot of responsibility when raising us.  Not only are they tasked with keeping us alive for eighteen years, but also for imparting wisdom that will guide us in later life.  They’re meant to demonstrate habits that we can replicate in our own adult life when we don’t know what to do; parents set up the solid base for us to kick off of.  Unfortunately, not all parents teach us the best habits, especially when it comes to financial literacy.  The very least a kid should be able to expect is to leave home with a clean financial history, but some parents can’t even do that.

Some people find themselves in between a rock and a hard place (a metaphor here referring to “desire to buy items beyond their budget” and “bill collectors”), and squeeze through it by using their kids’ credit.  Conveniently for them, these kids come with untouched credit, perfect for exploiting.  If you have the misfortune to be one of these kids and are the now the less-than-proud owner of a tanking credit score, take a breath. There are alternatives to living in a cardboard box outside of your local Walmart.  You can count on a stable financial future if you take the necessary steps towards repairing your credit and fixing the mess your parents created.

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How Could Your Parents Even Do This?

Let’s assume that you’re not asking how your parents could morally do this; that’s a whole other discussion with no easy answers.  As for how they are practically able to do it, that’s a little more clear cut, though still complicated.  Surely, there must be protections against this sort of thing, right?  

Well, it’s actually startlingly easy.  Consider that as a kid, you know next to nothing about the financial world other  than what your parents tell you.  It’s not as if you’re going to check your credit score independently — even adults often don’t do that.  Additionally, your parents don’t need to “steal” your information the way an average identity thief would. They already know your Social Security number, your birth date and your address. Notice that these are the exact same details that you’re supposed to keep secret in fear of identity thieves, and make no mistake, that’s exactly what these parents are doing: stealing their child’s identity.

Secured Credit Cards

Although some parents do blatantly open new accounts, put down their children’s’ names on utility bills, or nab a new credit card under their kids’ credit, many parents don’t have to resort to such tactics.  Instead, they rely on their adult children to co-sign on loans or form joint accounts.  They abuse the power dynamics of their relationship to pressure their children into signing away their finances, and while the parents might be able to buy that new car or handbag, their kids’ credit suffers as a result.  While the adult children might know that they are being taken advantage of, they might not realize how negatively their credit score is being affected, or they might not know how to refuse their parents’ request. Manipulating children into supporting their parents’ bad financial habits is not technically criminal, and might also be easier than stealing an identity, making it a more appealing option for unscrupulous (or desperate) parents with adult children.

Can You Reverse the Damage?

Yes, of course! But how difficult it is will depend on how long your parents have been abusing your credit.  It will also depend on if what they did was technically illegal or not.  

If your parents have been racking up debt under your name for some time, it will be more complicated.  The higher the amount of debt, the more that the credit bureaus will want someone to pay for it, and they’re not always terribly motivated to help you square away the situation just because you are a victim.  There are businesses that specialize in credit repair, and if your credit history is excessively complicated, that might be a better route to go.

You might want to consider a secured credit card in the meantime. You submit a security deposit to your lender, and your amount of credit is determined based on that amount.  It’s more like a debit card than a credit card, but it still allows you to build, or rebuild, credit over time.  This can be a huge benefit if you’re struggling to qualify for a credit card currently.  This way, you can move forward while also erasing mistakes of the past.

Additionally, if what your parents did was technically identity theft, it’s important that you report it.  You might not want to send your parents to jail; sometimes what they’ve stolen can amount to a felony.  However, it’s often necessary to file a police report if you intend on claiming that you’re not responsible for the charges.  Even though there will be a paper trail of the charges, and you might even be able to display that you were under 18 at the time, credit bureaus will require a police report all the same.

This leads to a very uncomfortable situation.  Many children do not dispute the damage done to their credit because of family loyalty.  They live their lives with misplaced debts hanging over their heads; some are driven to bankruptcy.  Still, many refuse to take legal action.  While this is ultimately a personal decision, reporting the identity theft is the easiest way to repair your credit and get your life back to where it needs to be.  Your parents have already stolen a part of your past- don’t let them take your future too.

Trying to pay for college despite the damage to your credit? For more tips and guides, visit our student finance learning center. Still trying to rebuild your credit? You can find more tips and guides at our credit score resource center. Are there debts on your credit report you aren’t responsible for? Visit our letter template resource guide for writing tips and more information.

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