How a Spouse's Death Affects My Credit

The death of a spouse can cause emotional and financial distress to the spouse left behind. During the course of a marriage, the financial lives of the spouses are often intertwined. A spouse's passing can rock the financial foundation of a family, especially if the death is unexpected. Your credit score impacts several areas of your life, including obtaining a job, so it's a good idea to understand how your spouse's death can affect your credit.

Credit Scores

The information contained within your credit report determines your FICO credit score, which ranges from 300 to 850. A FICO score has five distinct factors, according to myFICO. How well you pay your bills accounts for 35 percent of the score.The next 30 percent measures the amount of debt you have. Fifteen percent reflects the length of your credit history. Ten percent is the amount of new debt you've applied for, and the final 10 percent reflects the mix of credit types on your credit report.

Joint Credit Accounts

A joint account with a spouse will appear on your spouse's credit report and yours. Joint account holders are equally responsible for the payment of the account. If you have a joint account with your spouse and your spouse dies, you alone are then required to satisfy that debt. If you are unable to make the payments or make the payments late, the creditors will report that payment history to the credit bureaus and it will lower your credit score. Payment history is the largest factor in the calculation of your credit score. The degree to which the score drops will vary from person to person and depends on the other items contained in your report.

Community Property States

In a community property state, spouses are equally liable for debt accumulated during the marriage even if the debt is in the name of one party. If your spouse passes away with unpaid debts in his or her name, creditors may expect you to pay those debts. Creditors can sue you for that debt, especially if you have assets. If a judgment is received against you, it will appear on your credit report as a public record and remain there for up to seven years. According to myFICO, public records are a derogatory item to have on a credit report and it will also lower your FICO score.

Lack of Credit

It is not unusual for an income-earning spouse to have credit in his or her name while a non-working or stay-at-home spouse does not. If you are an authorized user on your spouse's accounts, those accounts will appear on your credit report. Thirty percent of your score reflects how much debt you have in relation to how much available credit you have. This is called credit utilization. If your spouse's accounts are closed subsequent to his or her death but they still have a balance, it will lower your score since it reduces your available credit while the debt itself remains. To protect your credit, pay the balance off before the accounts are closed and open a new credit account in your name. The good news is that positive credit history remains on your credit report for up to 10 years, even if the account is closed.