Debt Buyers & Your Credit Report

When a debt buyer parks an old debt on your credit report or re-ages an account, it might be violating the FCRA.

By , Attorney Case Western Reserve University School of Law
Updated 10/26/2023

When you have an old debt, such as a credit card, hospital, or utility bill, it's not uncommon for the original creditor to sell that debt to a third party, called a "debt buyer." In many cases, the account is so old that the statute of limitations has expired. So, the debt buyer can't legally sue you for the debt. But just because a debt buyer can't sue you doesn't mean it can't try to get you to pay up voluntarily.

Also, if a debt buyer can't sue you on an old debt, it might try other ways to get you to pay. One common collection technique is to "park" your old debt on your credit reports; it quietly reports an old debt as new on your credit reports. This tactic is also called "re-aging" a debt.

If you discover that an old debt has reappeared on your credit reports as a new account or contains inaccurate information about its age or status, it might be because a debt buyer parked the debt on your report or re-aged the status of your debt. These debt collection practices might be illegal.

What Is a Debt Buyer?

Debt buyers purchase old debts, often for pennies on the dollar, and then try to collect on those debts.

"Parking" Old Debt On Your Credit Reports

When a debt buyer re-ages a debt, it often falsely reports new account activity, such as recent payment delinquencies, or it might alter the date of your account, such as changing the date you opened the account or last made a payment. This re-aging can be problematic because if you apply for a car loan or mortgage, the bank might think you're having trouble paying your bills.

Know Your Rights When Dealing With Debt Buyers

The federal Fair Credit Reporting Act (FCRA) requires consumer reporting agencies (credit bureaus) to maintain an accurate file of your credit information. The FCRA limits how long negative information can appear on your credit reports.

Generally, a delinquent account can show up on your credit reports for up to seven years from the time your first delinquent payment was originally due on the account. If a judgment was taken against you on the old debt, it may also be reported for up to seven years from the date of judgment.

Some debt buyers try to get around this law by reporting old debt as newer than it really is. But by lying about the age of the account or the date of any delinquency, the debt buyer violates the FCRA.

The "Silent" Treatment is Illegal

Debt buyers often don't alert consumers that they've reported an old debt to the credit bureaus. So, you might not find out about the reappearance of this debt until you apply for a new loan or credit card. You then feel pressure to pay the old debt to clear it from your credit reports so that you can get the new credit or loan approval.

Because the FCRA requires debt buyers to notify you when they report negative information to a credit bureau, this practice violates the FCRA.

How to Get Old Debt Off Your Credit Reports

If you find an old debt on your credit reports, resist the temptation to pay it. Instead, you should immediately dispute the debt by doing one or both of the following:

Dispute the old debt directly with the debt buyer. State why you dispute the debt in writing and send it directly to the debt buyer. Once the debt buyer receives your written dispute, it is required to investigate the dispute and notify the credit bureau of your dispute. When appropriate, it must send corrected information to the credit bureau and request that the bureau remove the incorrect negative information.

Dispute the old debt with the credit bureau following the FCRA dispute procedure. File a dispute with the three major credit bureaus: TransUnion, Experian, and Equifax. Be sure to include all supporting documentation. The credit bureaus must reinvestigate the dispute or remove the negative information about the old debt from your credit reports.

Talk to a Lawyer

If, after you follow one of these dispute procedures, the debt buyer or credit bureau fails to comply with its obligations, you might be able to sue for violations of the FCRA. If successful, you might get actual damages, punitive damages, and attorneys' fees and costs.

Talk to an attorney for more information about filing a suit against a debt buyer for violating the FCRA.

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