Account Re-Aging: What It Is and How It Affects My Credit

In law, the statute of limitations on a debt is a time limit, the point after which a creditor can no longer file suit to collect a debt. The potential of a new statute of limitations has no bearing on how long negative information remains on a credit report.

Do Credit Reports Take Re-Aging of Debt Into Account?

The statute of limitations on a debt does not affect how long a negative item will remain on a credit report.

Creditors and collection agencies should never "re-age" your account to keep it on your credit report for longer, despite what you may have read or heard.

Account settlement

Negative information can remain on your credit report for up to seven years or seven years from the first late payment in a series that results in the account being canceled. This is also known as the account's "initial delinquency date."

The number of years a wrong item can remain on your credit report will not be increased because the date of the first delinquency is fixed. Federal law forbids collection agencies from adjusting the bill's original delinquency date, even if you make a payment or the debt is sold or transferred to a different collection agency.

To what extent do debts expire, and what is the statute of limitations?

What is meant by "statute of limitations on debt" is the time restriction during which a creditor or debt collector can file a lawsuit against you for an unpaid obligation. If your creditors file a lawsuit against you and win, they may be able to get a judgment against you and use that to garnish your earnings, drain your bank account, or put a lien on your property if you owe money.

When to File a Lawsuit and How to Find Out the Limitation Period

You can look up the statute of limitations in your state online, but it may not be easy to tell which laws apply to your situation.

Your contract, your creditor's home state, or your home state may all play a role in determining the applicable statute of limitations. The law of the state where you currently reside, or the law of the state designated in your contract, will often govern the debt's validity. The court may apply the shorter time limit if there is a discrepancy.

Erasing a Debt's Limitation Period and Starting Over

There are scenarios where you can unintentionally "re-age" your debt or reset the statute of limitations. Again, the legal bases for this vary amongst states.

The statute of limitations may need reset if the account is partially paid. Sometimes, simply admitting that you are responsible for the debt will suffice. However, this will vary by state.

Defense Restrictions

Keep any communication with creditors or debt collectors regarding previous debts to a minimum until you can consult with an attorney about your case.

Nonetheless, it would help if you didn't disregard a lawsuit threat from a creditor. Many states do not automatically allow the statute of limitations defense. To avoid having a judgment entered against you by a creditor, you will need to take steps to show that the debt is statute-barred.

An Uncommon Application of "Account Re-Aging"

Although "account re-aging" refers to an unauthorized adjustment of the "age of first delinquency," it can also signify something entirely different.

A credit counselor from a non-profit organization can represent you in negotiations with your creditors if you enroll in a debt management plan (DMP). The agency may agree to "re-age" your accounts as part of the discussion, which means they will waive late penalties and bring them up to date.

Make regular payments

If you need to catch up on your expenses and can't afford to pay the total overdue amount at once, bringing your account current may be your best option. Your on-time monthly payments will now contribute to your credit history.

However, this will only alter or eliminate the record of your prior late payments. Those negative items on your credit record will stay for another seven years.

Free Credit Report Monitoring, Always

Even though negative information on your credit reports should go on its own over time, keeping track of your progress as you attempt to establish credit and raise your scores is a good idea. This can be done without cost by signing up for a free Experian credit report online, including free credit monitoring and a free FICO® Score.