Re-Aging Delinquent Accounts

Re-aging your credit accounts is a technique that can be used to help clean up your credit history, particularly if you only had a brief problem and are now back on firm financial footing. Basically, when an account is re-aged, it's no longer considered past due. The creditor simply reclassifies the account as "current." For example, let's say that you're three months behind on one of your credit cards. If you can convince the credit card provider to re-age your account, it would be as if those three months never were. You'll still owe the same amount of money, but the late fees are halted and you're no longer considered delinquent. In essence, your missed payments are simply ignored. As a consequence, your credit score will also receive a significant boost because a major blemish is automatically deleted.

However, getting a creditor to agree to re-age your account is not particularly easy – and it's not something that you can do with any regularity. Generally, the most effective approach is to offer the lender some form of immediate payment, along with a proposed schedule of larger-than-minimum-amount payments, in exchange for the re-aging privilege.

Government guidelines concerning account re-aging have been set forth by the Federal Financial Institutions Examination Council (FFIEC), an interagency government body that prescribes uniform principles, standards and forms for the federal examination and supervision of financial institutions. In order for an opened-end loan (such as a credit card account) to be eligible for re-aging, it must meet several conditions. First, the borrower must show a willingness and ability to repay the loan. Additionally, the account should be at least nine months old; the borrower should make at least three consecutive monthly payments or an equivalent lump sum single payment; the loan cannot be re-aged more than once within any twelve-month period; and no new credit should be extended to the borrower until the account balance falls below the pre-delinquency credit limit.

If you're interested in having any delinquent accounts re-aged and you're committed to making at least the minimum monthly payments on time from now on, you'll need to contact your creditors in writing. In the correspondence, explain to the creditor the reasons that you were late making the payments in question, and why you're sure that you'll be able to meet your payment due dates in the future.

If the creditor consents to re-age your account, be absolutely certain to get the agreement in writing. Many consumers have been told over the phone that a creditor will re-age their account, only to find that the re-aging never took place. If the company won't put the agreement in writing, don't give up just yet; you can take matters into your own hands. Ask the customer service agent that you speak to for the name and mailing address of his or her supervisor. Then, immediately write a letter relating your conversation in detail and stating that you believe this to be an agreement to re-age your account. Send the correspondence via certified mail, with return receipt requested, to the supervisor.


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