The topic of this article comes across almost like a stupid question. What happens to your credit report when you die? You’re dead and I’m sure you’ve long since stopped concerning yourself with your credit report in lieu of more important items. The issue here has more to do with what your family members need to be aware of and do regarding your credit when you pass away.
Everything begins with the family notifying creditors, financial institutions, the Federal and provincial governments, and the Canadian credit bureaus that one of their relatives is now deceased. This guarantees that all parties have been informed and sets off triggers that will ensure that you credit history is really “history” and that it can’t be revived by criminals. It is important to inform these companies as soon as possible to help prevent fraud. Unfortunately, there are some fraudsters that read death notices just for information that can be used to steal your relative’s identity.
When creditors such as banks or credit card companies are notified of a death, this information is then reported to the credit bureaus and the account is coded as belonging to a deceased person. Only a particular account, such as a credit card, is coded as deceased, not the entire credit report. If the account is shared with another person jointly or as an authorized user, the deceased indicator may also be reflected on their accounts. The joint account is usually closed by the creditor and the other party will need to apply for the account under his own name.
At this point the deceased relative’s credit report will no longer be scoreable. A credit report with a deceased indicator cannot be scored. This helps to ensure that no new lender will extend credit in their name as a credit score is almost always required. Just one of the safety checks that are in place with credit agencies.
The Canadian federal government then adds the Social Insurance Number (SIN) of the deceased to their database as belonging to a deceased person. This database is a component of many fraud detection databases including those used by the credit bureaus. The credit bureaus place an indicator or flag on the credit report that indicates that this SIN belongs to a deceased person. This flag is on the entire credit report, not just an account.
To make sure the 2 credit bureaus (TransUnion Canada and Equifax Canada) have received updates it is best that you contact the bureaus directly. To have them place a death notice on your relative’s credit report, send a letter via certified mail with return receipt requested to each bureau (Canada Post offers this service.) In the letter you should include the decedent’s full name, Social Insurance Number, address, date of birth, date of death, and enclose a copy of the death certificate.
The credit report of your relative is not likely to be deleted but remains to prevent fraudulent accounts from being opened using your relative’s name and SIN. You should also place a credit freeze on the reports, if the bureaus allow you to do so, to prevent any access to your relative’s credit reports.