The credit industry is filled with all kinds of strange terms, one of those terms is “re-aging” and if you have any collection accounts on your credit report you need to understand what this word means.
Re-Aging defined
Collection accounts can and will hurt your credit but they are not allowed to hurt you forever. This is good news if you have ever had a collection. The Fair Credit Reporting Act (FCRA) places standards on how long these types of accounts can stay on your credit report.
The FCRA requires a collection account to be purged from your credit report no later than 7 years from the date of first delinquency with the original creditor.
Re-aging happens when the “purge” date is changed to a more current date than the date of first delinquency, allowing the account to hang around longer than allowed by the FCRA.
Not only will re-aging allow an account to stay on your report longer than legally allowed it will also most likely make the collection appear more recent than it really is which will have a greater negative impact on your score.
Changing other dates, such as reported dates and payment dates, is not re-aging, because it doesn’t result in the collection remaining on your credit report longer than allowed by law.
Two Clocks
When it comes to collections and charged off accounts there are two different clocks with which you should be familiar:
Credit reporting clock: The first is the seven-year credit reporting clock discussed above.
Nothing can legally restart the seven-year credit reporting clock — absolutely nothing. This includes the account being purchased by another collection as well as making payments on the account. In fact, any changing of the date of first delinquency on an account would be illegal.
Sue-able debt clock: The second is how long a creditor or collection agency may have the right to sue you for an unpaid debt. This second clock varies from state to state. In some states this statue is as little as three years, while some states you can be sued for up to 15 years. Knowing the statue for your state is an important thing to know if you have any of these types of accounts.
One thing to be careful of is unlike the “credit reporting clock” where nothing can legally change this date, you can re-age your account in terms of the “sue-able debt clock”! Usually this happens when making or agreeing to make payments on these types of accounts, so be careful before agreeing to payment agreements or get some help in this area.
For example, making a payment on an account could allow a debt collector the opportunity to sue you again. If you are sued and lose the case, then a judgment will be issued against you and that judgment could legally be allowed to appear on your credit reports for the next seven years.