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There have been plenty young adults, those just turning 18, with several credit profiles in their credit report. How does that happen if any 18 year old cannot take out a loan before 18 in most states?

Parents will oftentimes put their teenager on one of their credit cards. Sometimes, the credit card company will show the opening date of the credit card several years prior. If for example a credit card was opened by a parent in 2010, the date opened for an 18 year old will also report 2010 – when the teenager was 6 years old. In some instances, an 18 year old can have an 800 level credit score before he / she has even taken out a loan for themselves.

The Consumer Financial Protection Bureaus has issued a directive to the three major credit bureaus to remove such “junk” data from consumer’s credit reports. They want the credit bureaus to provide accurate information and not allow inconsistent and impossible information to appear on a person’s credit report.

“When a credit report accuses someone of defaulting on a loan before they were born, this is nonsensical, junk data that should have never shown up in the first place. Consumer reporting companies have a clear obligation to use better procedures to screen for and eliminate conflicting information, or information that cannot be true,”said CFPB Director Rohit Chopra.

The CFPB referenced children whose parents have stolen their identity for their own personal purposes. Especially vulnerable, the CFPB report says, are adopted children whose personal information is shared among numerous individuals.

This directive will make the playing field more even for those establishing their credit and also provide better oversight of misuse or identity theft.

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