The 7 Year Rule
As you may already know, the Fair Credit Reporting Act (FCRA) limits how long a derogatory account can appear on your credit report. All derogatory information is supposed to be removed after 7 years. (10-15 years for certain public records like Chapter 7 Bankruptcy or unpaid federal Tax Liens). Unfortunately, collection agencies and some credit furnishers 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 credit furnisher changed the “FCRA Compliance Date” when reporting the account 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 date of the first delinquency (10 years for certain public records). In some cases, collection agencies will report the FCRA Compliance Date as 7 years from the date they acquired the account (purchased 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 too uncommon to see the same debt with 2-3 different collection agencies, and 2-3 different FCRA Compliance Dates.
The Solution for Re-aged 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. It’s important to request debt validation from the collection agency so you can get all of the original paperwork from the original creditor and find out the correct FCRA compliance date. Once you have this information you can contact the credit reporting agencies to sort things out. If the credit bureaus aren’t being helpful, you can always file a complaint with the CFPB.
CreditFirm.net 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 or sign up and start working on improving your credit scores today.