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CFPB helps protect foster children’s credit

Sienna Kossman

When it comes to identity theft, the most vulnerable among the vulnerable may be foster children.

The Federal Trade Commission estimates that one of every 10 children is targeted for identity theft and the nearly 400,000 children in the U.S. foster care system may be even more vulnerable.

Foster children typically lack permanent addresses, and their personal information is passed through numerous hands and agencies over the course of their childhood. This creates more opportunities for fraudsters to snag enough information to compromise children’s credit for years to come if preventive measures aren’t taken.

CFPB helps protect foster children's credit

Congress passed the Child and Family Services Improvement and Innovation Act in 2011, which mandated that in order to be eligible for federal grants, state child welfare agencies must ensure foster children over the age of 16 receive free copies of existing credit reports each year. Agencies have been putting systems in place to address those needs.

Agencies are also required to help children dispute any errors or cases of fraud they find in their reports, which isn’t always easy for minors. Caseworkers now have more help, thanks to new Consumer Financial Protection Bureau (CFPB) resources made available May 1.

“The Bureau is very concerned about foster care children’s vulnerability to credit reporting problems that can wreak financial havoc for them,” CFPB Director Richard Cordray said in a press release. “We want to help ensure that youth leave foster care with clean credit so that they have a firm foundation for their financial future.”

The CFPB has published three action letter templates caseworkers can fill out and send to the credit bureaus if they find errors on the credit reports of children in their care. The letters correspond to the different scenarios caseworkers may face:

  • A credit report should not exist for the minor but does

In this case, the youth’s credit report has been reviewed and all items on the report are being disputed because he or she does not recognize any of the accounts.

  • The credit report has errors from before the youth turned 18

If someone was in foster care as a minor and has inaccuracies on their credit report from that time, this letter helps caseworkers’ dispute credit activity that occurred prior to the child’s release from the system.

  • The credit report has errors for foster care youth over 18

In some circumstances, foster care extends past the age of 18. This letter applies to situations in which a caseworker needs to help dispute a credit report error related to accounts that were opened after the youth turned 18 but are still under care.

The CFPB also recommends child welfare caseworkers teach youth about maintaining good credit before they leave their care, including checking credit reports for errors. The Ask CFPB webpage has updated answers to the questions caseworkers may have.

These new resources will help caseworkers more effectively do what is already required by law, because the sooner cases of child identity theft and credit fraud are caught, the better.


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