The credit history It is a report that compiles the behavior of people as payers or not, if they applied for any credit during their life. In Mexico there are two Credit Information Companies (SIC), the Credit Bureau and the Credit Circle, which are the only ones authorized to monitor our history. However, one of the main concerns for the family of a deceased is what will happen to the debts left by this person, especially those associated with credit cards and loans.
Although each bank establishes a different process in the event of the death of its clients, the Coru.com financial services platform provides guidance on the general steps that should be known.
Cancel the credit cards of a deceased
In principle, it is important to know that financial institutions are obliged to cancel a credit card when the cardholder dies, and they also eliminate the debt. In the case of departmental cards, they do not necessarily eliminate the debt.
A debt generally disappears for two reasons: 1) the cardholder acquires insurance at the time of contracting the card that covers the debt in case of death; 2) the bank forgives the debt on the line of credit when the owner dies.
In both scenarios, the relatives do not have the obligation to cover the debt that was in the account at the time of death, but they do have to notify the interested party in the following 180 days.
In the event that there are charges after the death, they must be paid, this applies both to the cardholder and to the additional cards.
What happens with the debts and the credit bureau of someone of a deceased?
Since we started a credit life, all our activity is included in the monthly report of the Bureau or the Credit Circle.
When a cardholder or debtor dies, the bank or finance company issues a notice to the Credit Bureau, and the latter, in turn, places an ‘observation key’ in that person’s record so that the information is not misused, for example, in the case of identity theft.
When do the debts of the dead affect the living?
In the case of joint credits with collateral, joint and several, group credit or similar, the debt will appear in the credit history of all those who are co-owners and co-responsible for the payment, as explained to Coru.com, Wolfgang Erhardt Varela, spokesman for the Bureau of Credit. This means that when someone dies, and was a bad payer, the negative history will be reflected in all the co-owners of that credit.
On the other hand, if the credit that the person had in life is of an asset that can be inherited, the credit contract can affect, for better or worse, the heir.
The main recommendation is to know in advance the contracts in the death insurance section, also called Release of balances due to death , Regime of the balance due to death , balance insurance either Unpaid balance release.
In addition, if you have remarried and/or changed legal beneficiaries, it is necessary to update the data in the corresponding banks and credit entities, so that the debt does not pass to people with whom you no longer have a relationship.