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Re-Aging May Keep Negative Items on Your Credit Longer Than They Should Be There


One of the most common questions that consumers have is how long certain items stay on their credit report. That answer is more complex than it should be, but a major issue regarding credit reports is one that causes debts and negative marks to show up on your credit longer than they legally are allowed to be there.

How Long Negative Marks Can Appear

Federal law only allows negative marks to show on your credit report for a specified period of time, and usually the clock starts at the date of your first delinquency on the account.

The law prohibits a practice known as re-aging. As the name implies, this is a process where creditors will change the date of first delinquency, usually pushing the date forward (more recent). As you can imagine, this effectively extends the amount of time something remains on your credit report. It can also affect your credit score, because more recent defaults hurt your score more than older defaults, and now the date of default has been made more recent.

For example, let’s assume that you defaulted on a retail card in January 2012. Under federal law, you can expect the negative marks—the late payments, defaults, etc. related to that account—to disappear from your credit around January to June of 2019, because seven and a half years is the maximum that a negative account can be reported to your credit.

But let’s say the collection agency changes your date of first default to January of 2013. Now, you’d have to wait until January 2020 or longer for that account to disappear. You are effectively being made to wait eight years (from 2012 to 2020), instead of seven, for that negative account to drop off your credit report.

How it Happens

In most cases, re-aging happens when a collection agency collects or debt buyer purchases debt from an original creditor. The collector, who may not even have records related to your account, will sometimes change the default date to the date they acquired or started collecting on the debt. This may be many years after the actual date of first delinquency.

Sometimes, collectors may mistakenly believe that every delinquent payment changes the date of delinquency. This is false, because the clock starts at the date of the first delinquency. So, if you don’t pay on a credit card debt, the clock does not restart every month with every missed payment, but some collectors may mistakenly re-age accounts for this reason.

Re-aging may happen accidentally, but creditors are in no hurry to correct these mistakes because the longer your credit is harmed by having a negative mark on it, the more pressure the collection agency can put on you to pay the debt.

Consumers will need to file a dispute through the credit reporting agencies and explain the nature of the problem. If the creditor or collection agency does not correct the problem, you may have a claim for damages under the Fair Credit Reporting Act.

If you see something on your credit report that seems incorrect, contact Jacobs Legal in Miami today to discuss if you’re entitled to recover damages under federal law.


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