Credit If Your Spouse Dies


Under the Equal Credit Opportunity Act, a creditor is not allowed to automatically change the terms or close a joint account solely because of the death of your spouse. A creditor may ask you to reapply or update your application. This can happen if the account was based originally on part or all of the income of your spouse and if the creditor has reason to believe your income alone will not support the line of credit. After you submit a re-application, the creditor will determine whether to change your credit limits or continue to extend you credit. Within 30 days of receiving your application, your creditor must respond in writing. During that time, you can continue to use your account with no new restrictions. You also must be given specific reasons, or told of your right to get this information, if your application is rejected. These protections also apply when you reach age 62 or older, retire, or change your marital status or name.

If your spouse dies, it is especially important to know what kind of credit accounts you have. There are two types of accounts which are joint and individual. You can permit authorized persons to use either type. An individual account is opened in one persons name and is based only on that person's assets and income. You might want to try to open one or more individual accounts in your name, if you are concerned about your credit status if your spouse should die. This way, your credit status will not be affected. When you are applying for individual credit, ask the creditor to consider the credit history of accounts reported in your spouse's or former spouse's name, as well as those reported in your name. If you can prove it reflects accurately and positively on your ability to manage credit, the creditor must consider this information. For example, you may be able to show through canceled checks that you made payments on an account, even though it is listed in your spouse's name only. A joint account is opened in two people's names, often a wife and husband, and is based on the assets and income of either or both people. Both the husband and wife are responsible for the debt.

If you open an individual account, you may authorize another person to use it. If you name your spouse as the authorized user, and if the account was opened after June 1, 1977, a creditor who reports the credit history to a credit reporting agency must report it in your name as well as your spouse's name. A creditor also may report the credit history in the name of any other authorized user.