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Re-Aging of Debts on a Credit Report

On Behalf of | Sep 25, 2012 | Consumer Protection

Some debt collectors report the debts they are collecting to the credit bureaus.  When they do, that can cause some aggravation to the consumer who is seeking to get out of debt and clear up their credit.  One
concern many consumers raise is the belief that the reporting debt collector is re-aging the account.  Re-aging an account can be troubling for the consumer.  However, if properly found, it can spell bigger trouble for the collector.

What is Re-Aging:

A negative mark can only remain on your credit report for up to seven years.  When a payment is missed, the missed payment notation will come off the credit report 7 years after the missed payment occurred.  When an account is charged off as a bad debt, the entire account will be removed after 7 years from the charge off.  Re-aging is when something is done in the credit reporting to cause the account to remain on a credit report for longer than 7 years.

It is not always evident or easy to find.  When a debt is being reported, it is reported with other information such as when the account was opened, when it was closed, the last balance, the highest balance, as well as other status information on the account.  Usually, the 7 year reporting is linked to a certain data field that is being reported that is either the date of last payment or the date last major delinquency was reported.  What some collectors have been known to do is change those dates on the credit report to be more recent.  Where a negative report of a charge-off that occurred in 2005 would be removed this year, if a collector were to instead report that the charge off occurred in 2010, the account will continue to be reported as a negative until 2017 – long past when it should be reported.   This practice violates the Fair Debt Collection Practices Act which provides that reporting credit information that is known or should be known to be incorrect is a deceptive act.

What is NOT Re-Aging:

Too many people get confused with this concept of re-aging.  Often, a consumer will see a collection item on their credit report and the collector will report a “date opened” on the report. This reflects when the collector opened the file in their office – in other words, when it was first assigned to them.  The misconception is that the “date opened” date is the 7 year date.  This is not the case.  It does, however,  have an effect of getting consumers to call the collector to complain about it- thereby giving the collector another chance at pressuring for money.

When reviewing the credit report, don’t pay attention to the date the collector says it was opened.  Look for the last delinquency date or last payment date.  If the collector does not report it, search the rest of the credit report for the original creditor which will report the date that it was charged off.  If the account remains on the credit report for more than 7 years since the last delinquency or charge-off date, then the collector re-aged the account

Why is affects us:

Re-aging can have a large detrimental effect on a credit score.  Items that are delinquent have a greater affect when they are newer, and over time they diminish in value.  As such a 6 year old delinquency is not as harmful as a 3 or 4 year old delinquency, and is much less harmful than a 1 year old delinquency.  Therefore, re-aging causes the debt which may be old, or even ready to come off a credit report, as a newer and more harmful mark on your report.

If your credit report has errors or debt collectors are reporting false information about you, CONTACT US for a free case review.  SmithMarco, P.C., has over 30 years of combined experience practicing law protecting the rights of consumers around the country.