Re-Aging of Debts on a Credit Report

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.