Home > Credit Score > Rebuilding Damaged Credit After Your Spouse Dies

Comments 3 Comments

[Update: Some offers mentioned below have expired. For current terms and conditions, please see card agreements. Disclosure: Cards from our partners are mentioned below.]

Recently we at Credit.com received a cautionary tale about the lasting impacts of bad financial decisions. Reader Rebecca wrote in to tell us that even though her husband passed away four years ago, her finances still have not recovered from the mess he left behind.

“We were married for 21 years,” and in that time, she says, he ruined her credit.

In an interview with Credit.com, Rebecca told us her husband asked her to apply for a Sears credit card in her name. He charged up to the card’s limit, and never paid the bill. Other unpaid bills stacked up; eventually the family had to declare bankruptcy. The situation became so bad that she took over the family finances altogether, she says, and started to repay their creditors. Her husband became ill and passed away, and she was left to undo the damage.

[Credit Score Tool: Get your free credit score and report card from Credit.com]

She says her credit score is so bad at this point that she can’t even get a credit card from a store like JCPenny. With no ability to borrow, even in times of emergency, she wonders what she’ll do if her car breaks down.

“I just wondered how I can ever get ahead where I can have a little peace of mind just in case something bad does happen,” she says.

Free Credit Check & Monitoring

Even though Rebecca is paying her current bills, she’s still feeling the effects of her ruined credit history. However, she can work to rebuild her credit score and get the financial security she needs.

But Tom Quinn, Credit.com’s credit scoring expert, warns that it may be a slow process. With high unemployment and a lingering recession, “it gets even harder and more frustrating for those people who may have some degree of negative payment history showing on their credit reports and are trying to re-establish their credit history,” Quinn wrote last summer in a story on building credit scores.

[Related Article: Tips to Rebuild Your Credit]

Here, then, are some tips for people who are trying to rebuild their credit scores.

1. Open a bank account. Your checking and savings accounts aren’t typically listed on your credit report, but the information is often requested on credit applications anyway, Quinn says. Also, it may make it easier to get a traditional bank loan, which would give you cash for a purchase and help you build your credit rating. “Many lenders will take existing customer relationship information into consideration when reviewing an application for credit, which could help increase your chances of being approved,” Quinn says.

2. Are you sure Sears won’t have you? Credit cards from department stores and gas stations are historically easier to get than cards from banks “because they make revenue from the purchase of merchandise in addition to revenue associated with the credit issuer,” according to Quinn. Even if you applied a few years ago and were denied, perhaps your score or the retailer’s lending requirements have changed since then. It doesn’t hurt to try again.

3. Apply for a secured credit card. When you open a secured credit card, the amount you deposit becomes your credit limit. Banks usually report payments to such an account to credit bureaus the same way they do with regular credit cards, so this is a way to build your credit score using cash you were already going to spend anyway.

4. Become an authorized user on someone else’s credit card account. When you do this, the card holder’s payment history appears on your credit report. This could be a boon to your credit score, but there’s a chance it could also hurt you, Quinn warns. “If the card holder has stellar credit, it has the potential to help boost the authorized user’s credit score,” says Quinn. “Note, there is risk with this option as any negative performance on the card holder’s credit card will also show on your credit report as well.”

5. Apply for a traditional credit card from a credit union or a smaller bank. “Smaller banks and credit unions may be more flexible and willing to work with you directly to help you establish credit,” Quinn says.

[Free Resource: Check your credit score and report card for free with Credit.com]

Image: Steve A Johnson, via Flickr

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

  • Pingback: Rebuilding Damaged Credit After Your Spouse Dies :: Affordable Mortgage Payment()

  • Nancy

    This story just breaks my heart, and makes me feel quite defeated. My husband and I are trying to recover from the debt incurred during his illness that began suddenly in 2004 and ended in 2009 (he had a stroke at age 40, heart attack at 41 and heart transplant at 42) and we make enough to keep our bills afloat, though American Express refused to work with us, and took me to court on my underpaying. That plus a modification of our mortgage caused my score to go to around 620, and it barely budges, though my husband had returned to work, and we earn around $200K a year. Creditors who once recruited us heavily treat us like dirt, and mostly me, as AMEX really hurt me, vs. my husband. He has immense guilt for this, as his credit is better, but I took on all financial responsibilities during his illness, and now I am paying for it dearly after our family emerged from that little bit of hell. I search your site often for some real advise to make a difference, but usually, like this article, there is little there, other than to tell me I will suffer for an additional 7 years after the 5 I already suffered (and aged, healthwise, myself) during the illness. One thing I know, is there needs to be alternatives for people who do NOTHING to cause their problem. My husband is adopted and his illness was genetically connected, for those that assume he had a bad lifestyle. I will never, ever endorse or do business with AMEX again, and I seize every opportunity to tell my story of how they treated us to others. I do hope the websites that are popping up that give people the heads up about these vultures become the norm, as someone needs to ring the bell on them.

  • Nancy

    By the way, I can’t help but notice that credit.com ignores medical related impacts on peoples finances. Obviously, it scares you folks to the extent that you won’t touch it in any way. Probably because there IS NOT GOOD OUTCOME….right?!

Certain credit cards and other financial products mentioned in this and other sponsored content on Credit.com are Partners with Credit.com. Credit.com receives compensation if our users apply for and ultimately sign up for any financial products or cards offered.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team