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Re-Aging a credit account on credit reports is illegal

When you hear the term “Re-Aging” in the context of consumer credit two very different definitions exist. This may explain why the term can be a huge source of confusion.

One type of re-aging on delinquent credit accounts is a legal positive practice that will help restore delinquent credit accounts over a period of time.

The other type of re-aging is an illegal practice that will negatively impact credit reports and scores. Illegal re-aging of a debt essentially turns back the clock on when a debt is due to drop off your credit reports.

Legal Re-Aging (Positive)

A creditor may have a process of re-aging a negative account, before it reaches the charge-off level through a mutual agreement between the creditor and account holder. Creditors may legally re-age a past due account. After a number of on-time payments a delinquent account is restored along with the account holder’s credit rating. Consumers who are granted re-aging may have suffered a temporary financial setback due to job loss or illness. It can be a positive experience to help consumers restore their credit.

Illegal Re-Aging (Negative)

According to the Fair Credit Reporting Act (FCRA), most negative credit information can remain on your credit report for 7.5 years (7 years + 180 days) from the date of the first delinquency (DOFD). The date of the first delinquency (DOFD) is the date a consumer first became 30 days late and no further payments were made on the account from that date forward. At this stage the DOFD usually leads to a creditor charging-off the delinquent account.

The FCRA Compliance Date is the official beginning of first date of delinquency (DOFD) which cannot be changed once an account is charged-off. The 7-year clock begins 180 days from the time you FIRST missed a payment. Once a charge-off or collection account reaches seven years the credit bureaus must purge the account and it will no longer appear on future credit reports. This date from which the collection must be removed is informally referred to as the “purge from” date.

It is illegal for a creditor or collection agency to change the “purge from” date on a negative credit listing, causing it to remain on a consumer’s credit report longer than allowed by federal law.

The Fair Credit Reporting Act states:

“The 7-year period shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity; charge to profit and loss, or similar action.”

Creditors can charge-off an account 180 days after the first date you missed a payment. The date you became delinquent begins the “Aging” process and once the debt has matured 7.5 years, it must be deleted from your credit report.

Some creditors and debt collectors will report to the credit reporting agencies a more recent status date, thereby extending the negative reporting of the charged-off account. This illegal practice will hurt your credit score.

“Re-Aging” a delinquent account is a serious violation of the FCRA. Once the original creditor reports the FCRA Compliance Date to the credit reporting agencies, it is set in stone. This date cannot be changed or updated under any circumstance.

The time clock on the date the account FIRST went delinquent cannot change no matter how many times a charged-off debt is purchased, transferred or sold to collection agency. Basically, the “purge from” date NEVER changes. The charged-off account can bounce from collection agency to collection agency but according to the FCRA, the debt can only be reported for 7.5 years from the date of first delinquency (DOFD).

How to Determine Illegal Re-Aging

Get copies of your from the major three credit reporting agencies. Do not use a tri-merged credit. The actual hard copy of your credit report from the three major credit reporting agencies is necessary. Check each credit report for the date scheduled for removal of a negative listed item.

On the Experian report it should be a section that says “Status Details: This account is scheduled to continue on record until (date).” On the Equifax report it should be a section that says “Date of 1st Delinquency” – add 7 years to that date. On the Transunion report it should be a section that says “Estimated month and year that this item will be removed. The ORIGINAL creditor and collection agency should have approximately the same dates under those sections (sometimes there is a month or two difference).

Look at the dates reported by the original creditor and the debt collector. Are the dates in sync with the FCRA Compliance date? The removal dates of the original account and the subsequent collection account, if any, should be the same. Sometimes they are a few months apart but they should be within the same year.

If the two entries show different dates, there may be a “re-aging” issue. Check your credit reports closely to ensure accuracy.

What to do about illegal re-aging

If you believe that an account on your credit reports is not reflecting the correct “purge from” date, then you should file a dispute with the credit reporting agencies and request an immediate deletion. If the original creditor or collection agency verifies that they believe the account is being reported accurately then take your complaint to the Consumer Financial Protection Bureau.

The complaint can be against the furnisher of information, the credit bureaus or both. Once contacted the furnisher of information or credit bureau will have to answer to the CFPB. As a last resort, you can take legal action. If you can prove it you have a substantial cause of action against the original creditor, collection agency or credit bureaus.

12 thoughts on “Re-Aging a credit account on credit reports is illegal”

  1. I had 2 credit card accounts that were bought by a debt buyer. They sued and garnished bigger account and are now trying to get me to settle payment with the remaining account. They just recently sent a settlement letter that showed Credit Card Company had charged off 12/2011. The Debt Buyer is reporting to all 3 CBs as being placed for Collection with them as of 03/2015! The letters they are sending even now state they can not sue me for the debt but will report to Credit Bureaus. I have already disputed with credit bureaus but all that happened was updated remark (Customer dispute) The original creditor/CC company is no longer showing on any of the 3 credit reports. This item is hurting my rating since it appears to be more “recent” collection account than what it actually is. (There was a change in household income in 2009 and then I lost my job in 2010. ) On Transunion they are reporting date of first delinquency as being 05/01/2011. I never made any payments on the account after change in household income in late 2009; job loss/Divorce 2011 and unemployed until 2012.
    Should I try to dispute with Credit Bureaus again or send a re-aging letter to the debt buyer? I have been working hard to get my credit rating back to where it was and even better than before all setbacks occurred in 2009.

    1. Creditors may choose to delete their reporting at any time prior to the date the accounts should be excluded from your credit reports. But that is not the same as the official credit report exclusion which is 7.5 years from the date of first delinquency (DOFD). Even if the original creditor no longer reports to the credit bureaus, that does not prohibit a debt collector from reporting the account up to the 7.5 year credit reporting date.

      But, the debt collector cannot report past the 7.5 year reporting time limit. In other words, the date the accounts are due to be excluded from your credit reports does not change. The problem is in determining that date.

      When accounts are excluded from your credit report due to the 7.5 year reporting time limit, it is done by the credit bureaus. It is the exclusion of their ability to continue to report a charge-off or collection account past the 7.5-year date of first delinquency of the original creditor account.

      The original creditor and any debt collector currently handling the account should have the SAME date of first delinquency. Unfortunately, that does not always happen. Plus, you have to add in the fact that the exclusion dates reported to the credit bureaus by original creditor and debt collector are often inaccurate and are not based on review of your actual payment history with the original creditor.

      The reason for this is the Fair Credit Reporting Act, Section 623(a)(5)A), simply says the furnisher of information must notify the credit bureaus of the date of delinquency on the account, which shall be the month and year of the delinquency that lead to the charge-off or collection. This date should be the same with both the creditor and any subsequent debt collector. Since these exclusion dates are often inaccurate, the projection dates estimated by the credit bureaus as to when an account is scheduled to be deleted can be inaccurate too.

      The best way to tackle this issue is with your records. It’s good you know when you made the last payment and no further payments were made, but if you have any old statements or bills from around that time, that would be your supporting documents (proof).

      You could dispute the accounts as obsolete, meaning too old to be reported on your credit reports, based on the date of first delinquency (DOFD) according to your records. Basically, if you stopped paying in 2009, then 2016 or, at the latest, 2017 is when those accounts should have been excluded (deleted) from your credit reports.

      If you have some type of proof I would dispute the accounts directly with the credit bureaus as too old to report based on the 2009 first date of delinquency, when no further payments were made on the accounts.

      I would start with the credit bureaus first. You may have a successful outcome and no further dispute or complaints would be required. But, you can also send the same dispute letter to the debt collectors stating the accounts are obsolete and too old to be reported to the credit bureaus.

      If the dispute process is unsuccessful, you have a legitimate complaint to send to the Consumer Financial Protection Bureau about inaccurate reporting of obsolete accounts. Complaints can also be sent to your state attorney general and the BBB. As you know it isillegal for a debt collector to report new dates to the credit bureaus (re-aging) and a very serious violation of the FCRA.

      You are well within your rights to have the accounts removed as long as the original date of delinquency was more than 7.5 years ago.

      The best of luck to you.

  2. I recently had an old charge off debt change its last reported to a more accurate date and change from closer to open debt and I haven’t used the card in 4 years or dispute the debt even. My score dropped a 135 points. Is this considered reaging or is it allowed? Is there anyway to dispute this off?

    1. Unless the date the account is due to be purged from your credit reports has been changed, re-aging has not occurred. Re-aging has to do with how long a negative account can remain on your credit reports. As long as they have not changed that date, the account has not been re-aged.

      What I suspect has caused such a tremendous drop in scores, given that nothing else has changed, is the updated last reported date along with the open status. With an open status, the delinquent amount may be negatively affecting your credit utilization (total amount owed on revolving credit accounts). Higher utilization means lower credit scores because the charge-off is negatively impacting your overall utilization.

      Once an account is charged-off it should never appear as “open.” With a charge-off the original creditor is declaring the debt to be uncollectible. It could be that the debt has gone to a collection agency and what you may be seeing is an “open” account in collection. Collection accounts are reported with an “open” status, until the debt is paid or the collection agency’s authority to seek payment is terminated.

      While the Fair Credit Reporting Act gives you the right to dispute inaccurate information, it might be somewhat difficult to dispute the current reporting because it may be accurate.

      One option would be to request the creditor to substantiate each and every fact they are reporting about the account. In other words, you would ask them to “Prove it or Delete it.” With this tactic you must be cognizant that if the debt is still within the statute of limitations, you can be sued for the unpaid amount. Plus, the account could be updated even more once you initiate a dispute, with a higher amount owed if additional fees or interests is added.

      Another option would be to settle the debt to stop the hemorrhaging to your credit score. Negotiating a pay for deletion would be the optimal solution. Unfortunately, some creditors report monthly to keep you FICO score low. The only way to stop it now, unless you are successful in a dispute, is to negotiate payment.

      1. doug donato demartini

        Thank you so much for the clarification. The debt shows charged off/wrote off profit/loss. It was sold to a debt collector but I got them removed months ago and just randomly the main creditor reopened it as charged off. Can I dispute the open status on the charge off?

        1. It may be that the creditor still owns the debt. The debt may have been assigned or transferred to the collection agency, not sold. If so, the original creditor can change the charge-off status from closed to open. Creditors are allowed to report and update every month until the charge-off is deleted due to the exclusion date or if you pay the debt.

          What I suspect is occurring is that you are actively engaged in repairing your credit and your scores are increasing. One of the unintended consequences of rebuilding your credit is that when your scores and history start to look better, old creditors and even collection agencies get alerted by the credit bureaus.

          As your scores get better, an original creditor and debt collector can get alerted that your credit profile is improving, signaling that you are now able to pay an old debt. FICO produces several score models not available to the consumer. One such score model is the FICO® Collection Score that provides creditors and collectors a report on how consumers repay credit obligations and whether a consumer with prior credit blemishes is seeking new credit.

          It is quite possible that your efforts in rebuilding your credit triggered the creditor to change the charge-off status from closed to open in an attempt to get you to pay. Your better credit habits can make you a target. You can be going along just fine and boom! A creditor updates a charge-off that has not been updated for years and your credit scores take a dive. It’s purposefully done to try to get you to pay. While I’m not saying you can’t dispute the charge-off status; or, some inaccuracy within the negative listing, the creditor is within their legal right to change the status from closed to open.

          1. doug donato demartini

            Yeah you are right, my scores have went up 200 points and everything was going along great and I was leaving that charge off alone since its 5 years old and I’ve read like all your articles so I thought messing with it was trouble so I didn’t but they still reopened it and made my credit utilization look bad and my score took a huge drop off again.

            If there is legitimate reasons to dispute the charge off, should I? Like I noticed my ssn number is off by a number and it shows a past due amount thats not correct. I can see 3 errors with the reporting right now.

            1. You have the right to dispute any inaccurate item on your credit reports. However, with older negatives a dispute has the possibility of opening up new collection efforts and updating the last day of activity which makes the negative item appear new. But at this point the creditor has already adversely impacted your scores by resuming monthly updates. In other words, a dispute probably would not hurt your scores any further.

    2. Just wanted to say thank you. This was an extremely informative article that answered all of the questions I had without having to go to an attorney.

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