Death and credit reports

When a family member, spouse or close friend dies, it isn’t easy for those who are left behind. Besides facing the emotional burden of having to come to terms with the loss, the organisational effort has to be picked up by the surviving relatives, family members or friends. Informing the authorities, organising a funeral, dealing with the will – or the lack thereof – are obligations that might need to be managed. This is especially difficult if there are debts to be paid.

Who to notify?

There are different authorities which you’ll need to notify. Firstly, a medical certificate needs to be obtained from a GP or hospital doctor so the death can be registered. This should happen within five days. Once this has happened, a funeral can be arranged. Next, you’ll have to notify some more authorities, for example HM Revenue & Customs (HMRC), the Passport Office and the local council. Following this, financial matters can be managed, like closing or changing bank accounts, or settling credit card bills. These can be tricky to handle if the amount of debt that is left behind is not known or you can’t find any documentation about existing contracts. In these cases, the deceased person’s credit report can provide you with some of the information you’ll need.

What happens to a credit report after death?

It’s important to notify credit reference agencies about the death. The agencies will add a note to the file of the deceased person. This is to prevent fraudsters from stealing the deceased’s details to obtain credit in their name. Once the note is in the file, credit searches carried out in the deceased person’s name will return a flag, notifying the lender about the death and the possibility of fraud.

The credit report will also have a record of what credit agreements and liabilities are outstanding. To help settle these, an authorised person needs to have access to the file.

Who can access the report?

The right to access the deceased person’s credit report can depend on whether or not there is a will. If there is, it might name an ‘executor’ who is in charge of dealing with the estate. This executor can apply for ‘probate’, a legal document providing proof of authority to make decisions about the possessions of the deceased person.

If there is no will, if no executor is explicitly named in the will or if the executor stated does not want to act, a spouse or the next of kin can act as ‘administrator’. They can apply for ‘grant of representation’ to be granted probate. Once probate is obtained, the executor or administrator can request a copy of the deceased’s credit report, so that lenders and creditors can be identified and contacted about the death. Some banks and lenders have special bereavement staff, who are trained to sort out financial affairs after death.

Why can the credit report be important?

As debt does not just go away with death, there are different types of liability that might be passed on to those dealing with the aftermath. If the deceased person has had debts, a mortgage, or other form of credit agreement, sorting out their financial affairs may be challenging. The first step is finding out what credit agreements are on the report, and if these are in their name or if they are held jointly with someone else, like a spouse or civil partner. This can be difficult when the deceased person did not keep records or did not have their documents in order.

Their credit report, however, can offer some information. An authorised person can access it to contact creditors and lenders directly to discuss what is owed and how to keep up payments.

Who has to pay back the deceased person’s debt?

The belongings of the deceased person are called the ‘estate’. It includes everything the person owned, such as money, property and other possessions. Creditors can only use what is left in the estate to recover what is owed. This is to avoid dragging spouses or other remaining family members into debt.

However, there is a difference between individual and joint debts. Jointly held financial agreements such as loans or credit cards need to be honoured by the remaining party in the agreement. This also applies to mortgages. A solicitor can help when the will is unclear or if there are conflicting opinions on how to handle matters.