Most people know that with a few exceptions, negative items will stay on your credit report for around 7 years.
The 7 years is generally measured from a date referred to as the date of last activity. The further along an item gets down that 7 year stretch, the less of an effect it will have on your credit score.
The newer a derogatory item is, the more damaging to your score it will be.
Re-aging occurs when dates on your credit report are (usually purposely) changed to make a negative item seem newer and therefore more damaging.
This is a common practice of creditors, collection agencies, and (seemingly) even credit bureaus…
And it's illegal.
The FTC has sued collection agencies before over re-aging (among other things), and as with many aspects of negative credit reporting, the credit bureaus and collectors aren't exactly innocent either.
It benefits ALL of them if negative information stays on your credit report longer. They all get financial benefit from your credit looking worse than it is.
Some have argued that re-aging could be accidental.
However, the nature of the problem becomes clear when we realize that (as with many credit report "errors"), re-aging almost NEVER happens in the consumer's favor.
(We say "almost" to allow for that slim chance that an item gets re-aged in such a way as to help the consumer. We have never, EVER, in over 15 years of researching credit, heard of re-aging happening to the benefit of the consumer, leading us to believe that it is done intentionally and with the intention of damaging the consumer's credit.)
So how does re-aging hurt your credit score?
The main ways re-aging can hurt is:
* It makes a negative item look newer, making it more damaging to your score than if it were allowed to age properly.
* It keeps negative items on your report longer, keeping you in "sub-prime" status as long as possible.
* It can make accounts look newer for collection purposes, making it easier for them to pass accounts around and inflict more damage to your credit score.
The key to fighting re-aging is knowing how to detect it. It's important to learn the dates involved in credit reporting and watch your credit reports closely for signs of re-aging.