The credit profile of your family member stays active even after their unfortunate demise. Even though most of us get their investments and savings realised, we often ignore reporting it to credit bureaus. Reporting the death ensures closure of financial accounts and prevents misuse or fraud in their name.
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Why Reporting the Death of a Relative is Important?
It is still not mandatory to report a death to a credit bureau as per Indian laws, but it is always wise to do so. Reporting the demise of a borrower with active credit score helps to:
- Prevents identity theft or fraudulent loans
- Ensures closure of all credit accounts and cards
- Helps update CIBIL, Experian, Equifax & CRIF High Mark records
- Provides legal clarity for family handling inheritance
Who can Report the Death of the Borrower?
Apart from various government bodies that report instances of death of borrowers to financial institutions such as banks, NBFCs, credit card providers, etc. from time to time, following individuals can legally report the death of a specific borrower to credit bureaus:
- Immediate family members (spouse, children, parents)
- Joint account holders or loan co-applicants
- Legal heirs with a succession certificate
It is worth mentioning that the credit bureau may not accept the reporting of demise of an individual done by friends, relatives, acquaintances, etc. However, they may initiate an enquiry about the same from the lending banks, government authorities or immediate family members/legal heirs.
How to Report a Death to Credit Bureaus
There is no official method prescribed by any credit bureau to report the death of a family member. But one can report it by following the steps mentioned below:
1. Collect All Relevant Documents
- Collect the Death certificate, a proof of identity (both the applicant and the deceased) and your proof of relationship with the deceased.
- The death certificate can be obtained from the local municipal body.
2. Contact the Lending Institutions
- Inform all lenders about the demise of the borrower with whom the borrower had an account
- Provide relevant documents for closure of accounts
- Clear dues/liabilities in case it is required and receive a closure NOC from the lender
3. Inform All 4 Credit Bureaus
- Inform all credit bureaus about the demise and eventually closing of all credit accounts
- Submit the relevant documents along with the copies of NOC certificates for all credit accounts
- Request for a confirmation of closure of credit accounts from credit bureaus
4. Check Credit Reports for Confirmation
- Check latest credit reports generated by all credit bureaus to confirm that all credit accounts have been closed successfully
- One free credit report is provided by all bureaus every year which can be beneficial in this case
- You can also visit Paisabazaar and get latest credit reports from multiple bureau for final confirmation
- In case there is a discrepancy, report the issue to the credit bureau immediately to prevent any fraud.
Suggested Read: Found Error in your Credit Report? Here’s How to Raise a Grievance
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How Credit Bureaus Respond to a Legitimate Death Report
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Also Read: How Long Does Negative Information Stay in CIBIL Report
Key Takeaways
- Failing to report a relative’s death may leave credit accounts active, which can lead to fraud or liability issues.
- Timely intimation ensures financial security and smoother settlement of obligations.
- If a family member passes away, always report to banks and credit bureaus to protect their financial identity.
- It is best recommended to clear all dues and close all credit accounts.
- Surrender the PAN of the deceased borrower with the Income Tax Department and request for deactivation.
- Once the PAN is deactivated, no new credit applications are liable to be accepted by lenders.
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