A Guide to Debt Re-Aging
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According to the Fair Credit Reporting Act (FCRA), debt in collections can only stay on your credit report for seven years plus 180 days after the date of first delinquency (DOFD).
However, if your debt has been purchased by a collection agency, these debts might still appear in your report in error after that designated time period is up. This practice of “re-aging” debt, whether intentional or not, is illegal—and it can destroy your credit if you don’t know what to do about it.
That’s why it’s important to know what rights you have under the FCRA and how old debt might reappear on your credit report due to debt re-aging.
Table of contents
- How the Fair Credit Reporting Act works
- What is debt re-aging?
How the Fair Credit Reporting Act works
The FCRA is part of the Consumer Credit Protection Act, passed in 1970 to ensure consumers’ access to their credit information is more transparent and that their privacy is safeguarded in credit reporting. Most importantly, the FCRA enforces fair and accurate reporting, which benefits consumers.
While the FCRA is a long document that outlines many rights designed to protect you, there are a few key points you should know as a consumer:
- You must be told if information in your credit report has been used against you
- You have the right to ask what your credit score is and know what information is in your file
- You have the right to dispute incomplete or inaccurate information
- Consumer credit agencies cannot report outdated negative information
If you notice an error in your credit report, it’s up to you to act. In fact, many experts recommend checking your credit report at least once a year for accuracy. Federal law ensures you can check your file from each national credit bureau for free once a year at AnnualCreditReport.com.
Additionally, it’s helpful to monitor your credit score from month to month. Your credit score can usually be found on your monthly credit card statement or on some free budgeting apps.
Related article: A Guide to Everything You Want to Know About Credit
Staying on top of potential issues with your credit is an important part of maintaining a healthy financial life. Knowing your rights under the FCRA especially will empower you to advocate for yourself and make things right if you’re being contacted illegally by a creditor or you notice something out of place on your credit report.
What is debt re-aging?
As mentioned above, debt that has gone into collections can only stay on your credit reports for seven years plus 180 days after DOFD. (Unfortunately for us all, however, this does not mean that you no longer have to pay the debt after that time period passes.)
Debt re-aging, however, means that the DOFD has been moved on your reports to show that a bill first went unpaid later than it actually did—and thus it will stay on your credit report longer. For example, if you didn’t pay a bill that was due in October of 2019 but your credit report shows that it was due in October of 2020, that means your debt has been re-aged.
Debt re-aging is a complicated process to understand, largely because it can be harmful and illegal in some circumstances but helpful to consumers in others.
Illegal debt re-aging
When your debts are charged off by your creditor—meaning they’ve been delinquent, or unpaid, for four to six months—the creditor will most likely sell the debt to a collection agency. When this happens, two new events will show up in your credit report:
- The balance on your delinquent account with your original creditor will change to zero
- A new entry will open under the “Collections” section
When your account enters collections, you’ll likely be contacted relentlessly by the agency via phone, mail, and so on. A particularly aggressive collector might even try to contact your family members or other people in your life. (Note: a debt collector can only reach out to people in your life to find out the best way to contact you, but they are not legally allowed to talk to those people about your debt.)
Related Article: Top 5 FAQs About Dealing with Debt Collectors
When your debt is purchased by a collection agency, it’s possible that it could be re-aged on your credit report—sometimes unintentionally, but occasionally on purpose. Either way, it is illegal, and the collector is violating your rights under the FCRA by incorrectly reporting the DOFD.
Re-aged debt is harmful to your credit for two key reasons:
- It appears in your report as a new delinquent debt, instead of an old debt owned by a new entity
- A later DOFD gives the collector more time to attempt to collect your debt within the statute of limitations on repayment
Since it stays on your credit report for that seven-years-plus-180-days period, re-aged debt will negatively affect your credit score longer than it should.
Positive debt re-aging
- Fair Credit Reporting Act. Federal Trade Commission. Retrieved from https://www.ftc.gov/system/files/documents/statutes/fair-credit-reporting-act/545a_fair-credit-reporting-act-0918.pdf
- A summary of your rights under the Fair Credit Reporting Act. Consumer Financial Protection Bureau. Retrieved from https://files.consumerfinance.gov/f/documents/bcfp_consumer-rights-summary_2018-09.pdf
- Experian. Understanding the fair credit reporting act. Retrieved from https://www.experian.com/blogs/ask-experian/credit-education/report-basics/fair-credit-reporting-act-fcra/
- Akin, J. (2019, July 22). What is a charge-off? Experian. Retrieved from https://www.experian.com/blogs/ask-experian/what-is-a-charge-off/
- Can debt collectors tell other people, like family, friends, or my employer, about my debt? Consumer Financial Protection Bureau. (2022, August 24). Retrieved from https://www.consumerfinance.gov/ask-cfpb/can-debt-collectors-tell-other-people-like-family-friends-or-my-employer-about-my-debt-en-332/
- DeNicola, L. (2020, June 9). What is account re-aging? Experian. Retrieved October 21, 2022, from https://www.experian.com/blogs/ask-experian/what-is-account-re-aging/