In this article:
- Does Re-Aging Debt Impact Your Credit Report?
- What Is the Statute of Limitations on Debt?
- How to Determine Your Statute of Limitations
- A Lesser-Known Usage of “Account Re-Aging”
Account re-aging generally refers to an old practice when some lenders or collection agencies would change the date when an account first went delinquent to keep it on your credit report longer. However, this practice is illegal, as creditors must report accurate information to the credit bureaus.
Unrelated, but often confused as the same thing, separate laws govern how long creditors have to collect an unpaid debt—also called the statute of limitations for the debt. There are situations when the statute of limitations may be reset, but that doesn't impact how long something can stay on your credit report.
Does Re-Aging Debt Impact Your Credit Report?
The length of time that negative items stay on your credit reports depends on when they first appeared on your report—not the debt's statute of limitations.
You may read or hear about re-aging in reference to a creditor or collection agency "re-aging your account" so it stays on your credit report longer, but that should never happen.
Most negative items can stay on your credit reports for up to seven years—or, if there is a series of late payments that leads to your account being closed, seven years after the initial late payment in that series. This is also called the date of first delinquency on an account.
The date of first delinquency never changes, which is why the length of time a negative item can appear on your credit report won't be extended. Even if you make a payment on the account or the debt is sold or transferred to a new collection agency, federal law prohibits collection agencies from changing the original delinquency date of the debt.
What Is the Statute of Limitations on Debt?
The statute of limitations on debt refers to the period of time during which a creditor or debt collector can legally file a lawsuit against you to try to collect an unpaid debt. When creditors sue you for an unpaid debt, they may be able to win a court judgment that allows them to garnish your wages, take money from your bank account or place a lien on your property.
The Fair Debt Collections Practices Act (FDCPA) and state laws specify a debt's statute of limitations. This date can vary depending on the state and the type of debt or agreement—a written versus oral contract, for example. In many states, the statute of limitations for debts is three to six years, and the timeline generally starts when you first miss a payment.
However, the statute of limitations doesn't affect how long information remains in your credit report. A debt that's outside the statute of limitations can still appear on your credit reports, and vice versa—a debt that's fallen off your credit reports may still be within the statute of limitations.
Some people also incorrectly assume that once the statute of limitations is passed, they don't owe the debt. In fact, you might still owe the debt, and creditors can still make attempts to collect it. Creditors may even try to sue you for debts even after the statute of limitations has expired. But if a creditor sues you, you can appear in court, show the judge proof that the statute of limitations has passed, and the judge could dismiss the case.
How to Determine Your Statute of Limitations
While you can find your state's statute of limitations online, figuring out which state's rules apply to your account isn't always straightforward.
The applicable time period could depend on the state named in your contract, the state where the creditor is based or the state where you live. But generally, the state where you live or that's specified in your contract will apply to the debt. If they're different, the court may use the shorter time period.
Resetting the Statute of Limitations on a Debt
In some situations, you can inadvertently reset the statute of limitations on your debt—what's known as re-aging the debt. Again, states' laws vary about what actions can lead to this happening.
Making a partial payment could re-age the account and start the statute of limitations over. Even acknowledging the debt is yours may be enough, although some states may require that the acknowledgment is in writing with your signature.
If creditors or debt collectors are contacting you about old debts, you may want to avoid discussion until you speak with an attorney and get professional advice about your specific situation.
But don't ignore a notice that you're being sued by a creditor. In many states, the statute of limitations defense isn't automatic. You'll need to take action to prove that the debt is time-barred to protect yourself from the creditor winning a judgment.
A Lesser-Known Usage of "Account Re-Aging"
While account re-aging generally refers to an illegal change in the date of first delinquency, the term is also sometimes used to mean something completely different.
If you sign up for a debt management plan (DMP) with a nonprofit credit counseling agency, the counselor may negotiate with your creditors on your behalf. Part of the negotiation may be to waive late fees and bring your past-due accounts current, which the agency may call "re-aging" your accounts.
Bringing an account current can be especially helpful if you've fallen far behind on the bills and can't afford to pay the full past-due balance. Now, your monthly payments will be on-time and can help you build credit.
However, even in this case, the record of your previous late payments won't be changed or removed. You'll still need to wait seven years for those negative marks to fall off your credit reports.
Monitor Your Credit for Free
Negative marks should automatically fall off your credit reports over time, but you may still want to monitor your progress as you work to build credit and improve your scores. You can do this for free by signing up to get your free Experian credit report online, which comes with credit monitoring and a FICO® Score☉ for free.
