A creditor agrees to re-age your past-due account and presto, your overdue credit card account gets zapped back to current. This should/will increase your credit score by 50-100 points!
“It’s a new life, in essence, for that account,” says Jalona Meador, manager of account management at Consumer Credit Counseling Service of Greater Atlanta. “It’s starting the clock over.”
In effect, that’s what re-aging does — allow you to start the clock over. Say you’re three months late on your credit card payments. If the creditor agrees to re-age your account, those three months are wiped out. Missed payments are forgiven. Late fees stop. You still owe the same amount of money, but you are no longer delinquent.
You get a fresh start and your lender has one less delinquency to report.
Getting a bright, shiny current status on an account is a great opportunity, but it’s not something creditors give out lightly. Federal regulators have seen to that.
In June 2000, the Federal Financial Institutions Examination Council set down new guidelines for issuers to follow when re-aging consumer credit card accounts. To be considered for re-aging:
- The borrower should demonstrate a renewed willingness and ability to pay.
- The credit card account should be at least nine months old.
- The borrower should have made at least three consecutive minimum monthly payments or the equivalent sum.
And there’s more. Federal regulators also placed limits on the number of times an account could be re-aged.
A creditor may re-age an account only once in a 12-month period and twice in a five-year period for open-ended accounts such as credit cards.