Speaking in parliament, Theresa Villiers said the current system is acting as a barrier to employment, education and housing.
"It is therefore working against rehabilitation, undermining a core purpose of the youth justice system," she said.
"I believe that the childhood criminal records system in England and Wales is anchoring children to their past and preventing them from moving on from their mistakes."
Once spent, a criminal record does not have to be disclosed to prospective employers. But Villiers said that the length of time it takes for a criminal record to be spent is too long and some spent convictions continue to appear on Disclosure and Barring Service checks, which are used by employers across the care sector, NHS, schools as well as by financial regulators.
She said that a key issue is that children currently do not have their own criminal records system, which could include shorter rehabilitation periods.
Villiers is calling for reform of the criminal records system for childhood offences in a 10-minute rule bill. Although such bills, which are a form of private members bill, rarely become law, they can raise the profile of issues among MPs.
The bill will have a second reading later this month (26 October) and has the backing of MPs including former Work and Pensions secretary and ex-Conservative Party leader Iain Duncan Smith and Labour MP David Lammy, who published a review of the treatment of black, Asian and ethnic minority (BAME) people in the criminal justice system last year.
Villiers said the current criminal records rules "also perpetuate inequality", particularly to BAME children and those who have experience of care.
"The government's race disparity audit concluded that children from a black and minority ethnic background are sadly more likely to end up with a criminal record," she said.
"A system that is unduly penal in its treatment of such records has a harder and more disproportionate effect on BME communities.
"Similar points can be made about children who have spent time in care."
Currently, custodial sentences of more than four years are erased after seven years. A justice select committee report released last October called for this to be reduced to four years, among other reforms to the way youth criminal records are disclosed.
Villiers' bill is the second attempt in the past year to introduce legislation to overhaul the system of disclosing children's criminal records.
Lord Ramsbotham put forward a private members' bill, which had its first reading in the House of Lords last June, and mirrored many of the committee's proposals.
In May 2017, the Court of Appeal ruled that the criminal records disclosure scheme was "disproportionate and unlawful".
The government has appealed against the ruling with a judgment from the Supreme Court "imminent", said Villiers, Conservative MP for Chipping Barnet.
"Whether the government win their case or not, the current approach is not working, and change is needed," she added.
Youth justice campaign group the Standing Committee for Youth Justice (SCYJ) has welcomed Villiers' efforts to overhaul the criminal records system.
"Someone who is convicted twice of shoplifting aged 12 still has to reveal those crimes when they apply to be a childminder aged 55," said SCYJ deputy chair Penelope Gibbs.
"This means that those convicted in childhood in reality serve a life sentence - they are never allowed to forget their mistakes. The SCYJ is pleased that MPs across the political divide are supporting Theresa Villiers' efforts to get our disproportionate laws changed."