• July 31, 2023
  • Posted by General Electric Credit Union
  • 4 read

What Happens to a Loved One's Credit File When They Pass Away?

Amidst the grieving process of losing a loved one, there are several practical matters that need attention. One is tying up loose ends involving your loved one’s credit file, which remains after their passing. Use this guide to understand the implications surrounding their credit, such as the risk of identity theft, and the necessary steps to take during this difficult time.

Deceased persons and identity theft 

A credit score is a numerical representation of an individual's creditworthiness and financial responsibility. When someone passes away, their credit score and file doesn’t automatically disappear. Because of this, it’s essential to inform the relevant creditors and credit reporting agencies about your loved one’s passing. 

You will need to provide their death certificate. After which the credit reporting agencies can update their records and mark the accounts as "deceased" or "closed." This step helps prevent any potential identity theft or unauthorized use of your loved one’s credit information. Unfortunately, this type of fraud – sometimes referred to as credit ghosting – is not uncommon. Thieves typically gain access to information through online obituaries and death records. 

The impact

Credit fraud of a deceased individual carries far-reaching consequences. Bad actors may use your loved one’s information to submit new credit applications, leading to accumulating debts that can impact their estate and financial legacy. This not only places a burden on surviving family members but can also complicate the settlement of the deceased’s affairs. 

Outstanding debts 

After a loved one's passing, their financial affairs are typically managed by their estate. The estate includes all the assets and liabilities left behind by the deceased. The executor, or administrator of the estate, is responsible for identifying and managing the deceased person's financial obligations, including debts and outstanding loans. These debts need to be settled using the assets within the estate.

Creditors can make claims against the estate to recover any outstanding debts during the probate process. The executor or administrator must assess the validity of these claims and settle them using the available assets. Failure to address legitimate claims may result in legal complications, negatively impacting the estate's creditworthiness.

  • Did you know joint accountholders or authorized users are solely responsible for the outstanding debt on an account they shared with a deceased loved one? 

Navigating the death of a loved one is challenging. General Electric Credit Union is here to support you as you work to settle your loved one’s accounts. Together, we can ensure a smooth transition while protecting their financial legacy. 

Back to blog home