First, keep in mind that most financial institutions cannot simply re-age accounts on a whim. Government regulators periodically examine a financial institution’s records and can order a financial institution to change its practices – or even close it down – if it looks like it is carrying too many high-risk loans. If a bank is re-aging numerous accounts, or doing so improperly, it could be hiding the fact that too many of its customers will never pay back their loans.
That said, accounts can typically be re-aged if the consumer:
Shows a willingness and ability to repay the loan; and
Makes at least three monthly payments on time (or a lump-sum payment equivalent to three monthly payments).
According to banking guidelines, new accounts (those less than nine months old) generally should not be re-aged and open-ended accounts (such as credit cards) should not be re-aged more than once in twelve months or twice in any five-year period.
Don’t confuse “pay for removal” deals with re-aging. You may be able to negotiate with a collection agency to remove an account from your credit report in exchange for payment. That is different than re-aging. In fact, collection accounts cannot be re-aged in the traditional sense, because a collection account will be considered negative as long as it appears on the credit report.
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