Author: Holly Johnson / Source: Wise Bread
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Please visit our Advertiser Disclosure to view our partners, and for additional details.Re-aging a delinquent credit card account can be a great way to wipe out payment errors in your past, or it can be a way to reanimate debts that you are no longer legally required to pay. The difference lies partly in who’s requesting the re-aging. Here, we’ll explain more about that difference and how you can make re-aging work in your favor.
What is positive re-aging?
Positive re-aging is a step your creditors can take to change the delinquency status of your debt on your credit record. It’s designed for people who have hit a rough patch in the past but are now on the mend financially and able to make timely debt payments.
You may want to ask for a re-age because until you’ve paid back everything you owe, you could still be reported as “late” every month on your credit report, even though you are making payments every month. Mike Sullivan, a personal finance consultant with Take Charge America, a national nonprofit credit counseling agency, says this scenario is often referred to as “rolling lates.”
“If you miss a loan payment in April, you are 30 days late,” Sullivan explains. “The payment you make on time in May is considered your April payment and you are again 30 days late.”
According to Sullivan, you never catch up until you send an extra payment that includes the missed payment plus all interest and penalties. “Every reported late payment is another deduction from your credit score and diminishes your credit rating,” he says.
When your credit is re-aged, two things can happen: either your creditors will go back and mark all your payments as on time, or they’ll mark every payment going forward as on time and leave the late payment marks in place. Either way, you’ll at least be reported as being current on your bills. The damage to your credit report will stop mounting.
Not only that, but re-aging can bring late fees to a halt. This makes it easier for you to stay on top of your bills and actually pay back what you owe.
Get a credit reboot with re-aging
If re-aging is a strategy you’d like to pursue to repair your damaged credit, there are a couple of avenues to pursue. Most of the time, re-aging takes place as part of a debt management plan you sign up for, meaning the organization you’re working with will initiate re-aging with your creditors on your behalf.
In case you’re not familiar with debt management plans, they’re arrangements drawn up…
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