Selling or transferring an account to a new creditor does restart the deletion time period



Dear Experian,

A creditor of mine sold my credit card debt to another company after seven years. Do I now have to wait another seven years to have it removed from my credit reports?

-        LDE


Dear LDE,

No, you do not have to wait another seven years if your lender sells your account to someone else. Selling an account to a collection agency does not restart the period of time a debt will remain on your credit report.

Negative accounts remain on file for seven years from the original delinquency date of the debt. The original delinquency date is the date the account first became delinquent and after which was not brought current. This date is used to determine when the late payment information is deleted from your credit report — no matter who owns the debt.

Federal law requires that collection agencies report the original delinquency date from the original account. Because the original delinquency date does not change, the seven year time frame does not start over when an account is sold or transferred to a another lender or collection agency.

That doesn’t mean that the creditor can’t continue to try to collect the debt, or that they can’t sell the account to a collection agency for the purpose of collecting on the debt. However, once the negative information reaches seven years old, both the original account and the collection account will be removed from your report.

We recommend that you get a copy of your credit report and ensure that the correct date has been reported to us.  If that date is correct, you don’t have to worry. It will be automatically deleted.

Thanks for asking.

Maxine Sweet
Vice President, Public Education