What Happens to Your Credit When You Die?

What exactly does happen to your credit when you die? It’s certainly not an everyday question that comes up, but whether you’re dealing with the estate of a loved one, or you’re wondering for your own estate-planning purposes, it’s certainly an important one. It’s no minor detail to secure the credit details in the event of one’s death, as a person’s credit can still be vulnerable to identity theft and fraud.

When someone dies, all the creditors of the deceased need to be notified, as do the three major credit reporting agencies, Equifax, Experian and TransUnion. This responsibility falls to the executor of one’s estate. When contacting the credit reporting agencies, an executor of the estate should request that the credit file be flagged as “Deceased: Do not issue credit.”

The executor of the estate also must forward copies of the death certificate to creditors and credit reporting agencies. Be sure to send certified letters and keep copies of all correspondence regarding the deceased’s credit.

To check to whether there are any outstanding debts, the executor of the estate also may wish to request a copy of the deceased’s credit report.

Heirs & Debt

So what happens to your debt when you pass away? Well, if you jointly held debt with your spouse, for example, the joint account holder or co-signer on a credit account becomes solely responsible for the payment of the account.

When it comes to solo credit accounts, however, heirs are generally not responsible for them. However, there are exceptions.

In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin and, if you choose it, Alaska) one spouse may be liable for the debts of another, even if they didn’t agree to them or even know about them.

So in a community property state, a surviving spouse may be held accountable for the credit card debt of a spouse after he or she dies.

Many community property states do offer exceptions for education debts, unless the surviving spouse co-signed for the loan.

According to the U.S. government, federal education loans will be canceled once the borrower dies and the school or lender is sent a copy of the deceased’s death certificate. But lenders of private student loans may have different policies.

So it’s all the more important to be on the same page with your spouse on an ongoing basis about all outstanding debts, and know which ones you might end up being responsible for. And, of course, have a plan to pay them off if and when you need to.

Checking your own credit reports regularly can help you keep track of your own debts, as well as any of your spouse’s debts that are also in your name. You’re entitled to your free credit reports once a year through AnnualCreditReport.com. Another good habit to cultivate is checking your credit scores regularly, as a sort of snapshot of your credit. There are a number of ways to get your credit scores for free, including through Credit.com, where they are updated for you every 30 days.