Re-Aging Your Accounts

Re-aging your accounts is a technique you can use to clean up your credit history, particularly if you had a brief problem and you’re back in control.

Basically, when an account is re-aged, it is no longer considered past due. The creditor simply relabels the account “current.”

Let’s say you are three months late on one of your credit cards. If you can convince the credit card provider to re-age your account, it’s as if those three months never happened. You still owe the same amount of money, but the late fees stop and you are no longer considered delinquent. Your missed payments are simply ignored.

Re-aging an account can be really good for your credit score. A big “late” blemish comes off your account and it’s considered current.

Getting a creditor to re-age your account is not easy—and it’s not something you can do often. The best approach is to offer some form of payment immediately, plus offer a schedule of more-than-minimum payments, in exchange for the re-aging.

There are government guidelines concerning re-aging, which have been set out by the Federal Financial Institutions Examination Council (FFIEC). The FFIEC is an interagency government body that prescribes uniform principles, standards and report forms for the federal examination of financial institutions and makes recommendations to promote uniformity in the supervision of financial institutions.

According to the FFIEC, for an opened-end loan— like a credit card account—to be eligible for re-aging, it must meet the following conditions:

• the borrower should show a willingness and ability to repay the loan;
• the account should exist for at least nine months;
• the borrower should make at least three consecutive monthly payments or an equivalent lump sum payment;
• a loan should not be re-aged more than once within any 12-month period; and
• new credit should not be extended to the borrower until the balance falls below the pre-delinquency credit limit.

But there’s no point in calling and e-mailing and begging a creditor to re-age your account if there is any chance that you will wind up delinquent again in the near future. Save your energy and time for other credit-saving efforts.

If you are committed to making at least the minimum monthly payments, on time, moving forward, then you’ll need to contact your creditor or creditors in writing. Tell the company:

• why you were late on the payments in question; and
• why you know you’ll be able to pay on time in the future.

Get an agreement to re-age your account in writing. Many consumers have been told over the phone that a creditor will re-age their account, only to discover that the re-aging never takes place.

If the card company won’t put the agreement in writing, you can take matters into your own hands.

Ask the customer service agent to give you the name and mailing address of his or her supervisor. Then, write a letter describing your conversation in detail, state that you believe this is an agreement to re-age your account and send it via certified mail, with a return receipt, to the supervisor.

Next: What Will Creditors Do?