In the credit reporting world, the idea of what is a re-aged account is often misconstrued. Under the Fair Credit Reporting Act, negative information cannot be reported for more than 7 years. Re-aging an account would be something a creditor does so that the account stays on a report for longer than 7 years.
When creditors report their account information to the big 3 credit reporting agencies (Trans Union, Equifax and Experian), they report information including what dates payments were missed, or what date the loan went into default. The credit bureaus use that information to calculate out 7 years, and make sure that information gets deleted by that time. However, if a creditor changed that delinquency date within its own system, and then reported that information to the credit bureaus, the account will stay on a report longer than it is supposed to.
What to do? In the unfortunate situation where you know you are unable to pay off an account, just simply save the late notices and collection notices you are about to receive. They will be dated, and identify when you started to go delinquent. If the account actually gets re-aged, dispute to the credit bureaus and provide the proof you have.
A common error consumers make is when reviewing collection accounts. A collection agency will report its “Date Open” as the date in which it actually received the account from the creditor. People seeing that on the report often mistaken that the collection account will be reported for 7 more years. That is not so. Typically, the collector will also report the last payment date provided by the creditor, so the credit bureaus are given the correct date to calculate the 7 years. Of course, this is not always so, and it is possible that a collector may re-set the last payment date so that it could have longer to report the debt – thereby increasing its chances of coercing payment.