ReAging – The Collection Loophole
by: Michael Creditfirm.
How long does an account appear for on a credit report?
As you may already know, the Fair Credit Reporting Act (FCRA) limits how long a derogatory item can appear on your credit report. All derogatory information is supposed to be removed after 7 years. (10-15 years for certain public records). Unfortunately, collection agencies and original creditors use a loophole known as re-aging debt to circumvent this law and continue to report derogatory accounts for longer than 7 years.
What is Re Aging?
Re-Aging means the collection agency or the original creditor change the “FCRA Compliance Date” when reporting to the credit bureaus (Equifax, Experian, TransUnion). The FCRA Compliance date is the date when the reported account will be removed from your credit report. This should be 7 years after the first delinquency (10 years for certain public records). Most commonly, collection agencies will report the FCRA Compliance Date, 7 years from the date they opened the account (bought the account from the original creditor), not 7 years from the date the account became derogatory. Considering collection agencies often resell debt back and forth between each other, it isn’t uncommon to see the same debt with 2-3 different collection agencies, and 2-3 different FCRA Compliance Dates.
The Solution for ReAged Accounts
The best way of remedying illegal action like this is to be proactive. Re-Aging has become common practice and we see it more and more every day. Credit Firm has helped thousands of our clients delete re-aged accounts from their credit reports. If you think that you may be a victim of re-aging, please call 800-750-1416 for a free consultation with one of our experienced credit consultants.