What Happens to Your Credit File When You Die?

What Happens to Your Credit File When You Die? article image.

After someone dies, surviving family members may have a lot of decisions to make, and a few questions as well. "What should we do with Mom's good china?" "Does anyone know where Dad put his will?" One question they may not consider is what happens to their loved one's credit file. When a person dies, their credit file isn't closed or deleted right away. Instead, it is flagged to indicate that they are deceased, which helps to prevent identity fraud. Here are some steps family members can take to speed up this process and help protect the credit file from thieves until it is closed for good.

Where Does Your Credit File Go When You Die?

After you die, your Experian credit file will eventually be closed, but it doesn't happen immediately. There are several ways the credit bureaus may be notified of your death:

  • By lenders: When you pass away, your spouse or the executor of your estate should alert your creditors of your death. The next time the creditor updates your accounts with the credit bureaus, they will also report that you are deceased. (If you have joint accounts with your spouse, it's important the creditor is told that only one account holder has died, or your spouse may be mistakenly reported as deceased.)
  • By the Social Security Administration (SSA): The SSA periodically sends a list of the newly deceased to the three major consumer credit reporting agencies: Experian, TransUnion and Equifax. This file isn't comprehensive, however; it only includes people who were receiving Social Security benefits and whose deaths have been reported to the SSA. Typically, the funeral home will report your death to the SSA. Your spouse or estate executor can also choose to notify the SSA themselves by calling 800-772-1213 or going to the local SSA office in person.
  • By your spouse or estate executor: Your spouse or your estate's executor may want to notify the credit bureaus of your death themselves. This can be faster than waiting for the SSA or lenders to do it. When the death is reported to one credit bureau, they will alert the others.

Once a credit bureau is notified that you've died, they'll flag your credit file with an indicator that you are deceased, which helps to prevent fraud. If anyone tries to apply for new credit in your name, lenders will be alerted that you are deceased so they know the applicant is trying to steal your identity and can take appropriate measures.

Your credit file will not be closed or deleted right away. Leaving the file open with the deceased indicator flag on it is an important tool that can help prevent identity theft. If your credit file were deleted and someone applied for credit in your name, a credit check wouldn't reveal any information. With no way of knowing that the applicant was trying to commit identity theft, the lender might issue the thief credit in your name.

Any credit accounts showing the deceased indicator will be deleted after seven years. Over time, all your accounts will be deleted and the credit report will no longer exist.

How to Report a Death to the Credit Bureaus

The sooner your death is reported to the credit bureaus, the sooner they can flag your credit report, which helps to prevent fraud. Rather than waiting for the credit bureau to receive notice from the SSA or be notified when creditors send their account updates, your family may want to report the death to credit bureaus themselves.

Only your spouse or another person with legal authority, such as the executor of your estate, can notify credit bureaus of your death. They will need a copy of your death certificate; anyone other than your spouse will also need to show proof that they're legally authorized to act on your behalf, such as with a copy of a legal document with a court seal showing that they are the executor of your estate.

When one credit bureau is notified of a death, they will notify the others, so there's no need to alert all three. Here's how to report a death to each credit reporting agency:

  • Experian: Mail a copy of the death certificate to Experian's Consumer Assistance Center, P.O. Box 4500, Allen, TX 75013, or upload it online.
  • TransUnion: Mail a copy of the death certificate to TransUnion, P.O. Box 2000, Chester, PA 19016.
  • Equifax: Mail a copy of the death certificate to Equifax Information Services LLC, P.O. Box 105139, Atlanta, GA 30348-5139.

In addition to notifying the credit reporting agencies of your death, it's a good idea for your family to request a copy of your credit report from each of the three credit reporting agencies. Not all creditors report to all three of the credit bureaus, so getting this information will provide a list of accounts that your survivors can use to notify each creditor that you have passed away.

Who Is Responsible for My Debt When I Die?

Now you know what happens to your credit file when you pass away, but what about your debts? Will your spouse be responsible for paying your bills? In most cases, the answer is no, but there are some situations where others may be responsible for your debt.

After you die, any debts you owe are paid from your estate—a term that simply refers to all of the assets you owned when you died. If you had a will, the executor you named will use the money from your estate to pay any debts you left behind. If you die without a will, a judge will make decisions about how your debts will be paid and will select an administrator to execute those decisions.

Debts are classified as secured (collateral-backed loans, such as mortgages or auto loans) and unsecured (debts without collateral, such as most credit card debts and student loans). In general, secured debts must be repaid or the collateral will be repossessed. If your estate doesn't have enough money to pay all your debts, debts will be prioritized for repayment, with secured debts having the highest priority. Your executor or administrator may have to sell certain assets to pay your secured debts, while unsecured debts may remain unpaid.

Your spouse or another family member may become responsible for the following debts after you die:

  • Joint debts: Any debt held jointly with your spouse will become their responsibility. This commonly includes mortgages, auto loans and lines of credit. Your spouse is also responsible for paying the balance on any joint credit card accounts, even if you, not they, incurred the charges.
  • Cosigned debt: Anybody who cosigned on a loan, credit card or other debt for you becomes responsible for that debt if you die.
  • Home equity loan on an inherited house: If you had an outstanding home equity loan on a house that you left to an heir, they will be responsible for repaying the loan after you die.
  • Timeshares: If you owned a timeshare and put your heirs' names on the deed, they will inherit the timeshare—and the responsibility for any associated maintenance fees.
  • Medical debt: Did a spouse or other family member sign documents authorizing your medical treatment? Depending on the state where you live and the wording of the documents, they may have accepted legal responsibility for any medical bills your health insurance didn't cover.

If you had a credit card in your name only, your spouse is not responsible for the debt. A spouse or child who was an authorized user on your credit card is not responsible for that debt, either.

There may be some exceptions to these rules if you live in a community property state. There are nine such states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Spouses in Alaska can choose to hold their property in common. Under community property laws, any debt that one spouse incurs is typically also the responsibility of the other. Because laws on community property may vary from one community property state to another, your heirs should consult an attorney with experience in estate law or check with your state attorney general's office to determine their obligations.

Worried that your spouse will have to use your life insurance to pay off your debts? Don't stress. Life insurance proceeds are protected from creditors when you die, as are:

  • Retirement accounts: These include employer-sponsored 401(k) or 403(b) plans, Solo 401(k)s, SEP IRAs, Simple IRAs, Roth IRAs and health savings accounts (HSAs).
  • Brokerage accounts: These include any taxable investment accounts opened with a brokerage or investment firm. Brokerage accounts may invest in stocks, bonds, REITs, CDs or other investment vehicles.
  • Living trust: Placing your assets in a living trust means your estate doesn't have to go through probate, a potentially costly and time-consuming court proceeding. Depending on the type of trust you choose, certain assets may also be protected from creditors after you die.

The Bottom Line

Your credit report is vital to your financial life. Credit bureaus use the data in the report to compile your credit score, a figure that affects your ability to get an auto loan, home mortgage, credit card or other types of credit.

Even after you're gone, your credit file continues to serve an important purpose. By flagging your file with a deceased indicator, credit bureaus can help to prevent identity fraud, saving your family from further grief and loss.