Negative re-aging occurs if a collection agency changes the delinquency status of an account to fool the credit bureaus into thinking it’s more recent than it really is. It’s illegal to extend the 7.5 years a negative can remain on credit reports.
Hi Lisa, I love your web page. I am concerned. I have 1-2 creditors that continue to re-age old debt that has reached the Statue of Limitations (California). I am assuming it is 7 years from the DOLA.
I don’t know what to do. I am writing a letter to the credit agencies and the creditor (Fashion Bug) to verify their methods of verification. I hope this works. Any suggestions would be appreciated.
I truly love this web site it is so informative!! Thanks for helping to even the playing field. I look forward to hearing from you soon.
Answer: First make sure you have actually experienced Re-Aging. It is a serious violation of the Fair Credit Reporting Act and you have a pretty good lawsuit if it has occurred.
Re-aging occurs when a creditor or collection agency reports a more recent status date which extends the 7.5 year period a negative account may legally remain on your credit reports. I am wondering if you may be confusing re-aging with the statute of limitations on debt and the statute of limitations on how long negative credit can remain on credit reports.
Statute of Limitations on Debt. Each state has a statute of limitations on debt which determines how long you can be legally be sued for an unpaid debt. In California the statute of limitations is 4 years. This means after 4 years has passed, even though a debt is unpaid and you still owe it, you can no longer be sued for that debt.
To calculate the statute of limitations on debt start with the date you made your last payment meaning no other payments have been made on that account and add 4 years to that date. For additional information see the article “Statute of Limitations on Debt.”
But this does not mean the credit bureaus cannot continue to report the debt in your credit files for 7.5 years. Even though you can no longer be sued, the credit bureaus will more than likely continue reporting the debt on your credit reports. The statute of limitations on debt is completely separate from how long negative credit can remain on your credit reports.
Re-aging a Debt. If the creditors mentioned above have re-aged a debt this is very serious. The way you can tell re-aging has occurred is to calculate when the debt went into charge-off status. A creditor will charge-off an account after a certain amount of time of nonpayment, typically after 180 days of non-payment. The creditor can no longer keep the debt on their books as an asset and therefore write it off as a bad debt. This is a charge-off.
Within 90 days of a charged-off debt being placed on your credit reports, the creditor must report the FCRA Compliance Date. The FCRA Compliance date determines the starting date of how long the negative item can remain on your credit reports.
Once the original creditor reports the FCRA Compliance Date to the credit bureaus, it is set in stone. This date cannot be changed or updated. It does not matter if the bad debt is transferred or sold from one collection agency to another. The FCRA Compliance date cannot change; otherwise, consumers would have a life sentence of debt on their credit reports.
An unpaid debt can be bought and sold among junk debt buyers repeatedly; until that debt is paid. You may have heard of zombie debt coming back to life to haunt consumers. This happens because unpaid debt never goes away. But unpaid debt cannot be reported on your credit reports forever. There is a time limit and that is 7.5 years for credit card debt. Other negative items such as bankruptcy, tax liens and judgments can remain longer.
Actions to Take. Find out what is the FCRA Compliance date. There is a very simple, straightforward letter you can write to each of the credit bureaus here. Once you establish the correct date the negative accounts are to be removed from your credit report, then you can accurately assess whether re-aging has occurred. If re-aging has occurred there are several actions you can take. Read “Steps to take if re-aging has occurred.” The best of luck to you.