Dealing with Debts from the Distant Past

The present credit crunch has many people scrambling to dust off their credit reports and ensure all their financial ducks are in a row. When trying to refinance or get an entirely new mortgage, every minute detail on a credit report can mean the difference in wasting- or saving- thousands of dollars over the life of the loan.

One of the most frequent complaints of American consumers with credit issues centers around unknown debts that mysteriously appear on a report from the credit bureau with an unrealistically recent date. These debts are often from vaguely named organizations, such as PCS or Revrec, with no apparent connection to any known current creditors.

In most cases, these phantom companies are actually collection agencies who mask their identities behind ambiguous acronyms or abbreviations when making damaging- and often illegal- negative credit reports. Some of these names are easy to discern: RevRec, for example, is simply a shortened form of Revenue Recovery, a collections agency based in Knoxville, Tennessee. Others, such as the "PCS" used by Professional Collection Services of Orlando, Florida, are frustratingly difficult to even identify, much less dispute.

Why would these companies go to such lengths to mask their identities? Often, they do so in hopes of operating somewhere below the radar, as they operate outside legal boundaries in an attempt to collect payment and produce profits. By far, the most common of these abuses is a process called "re-aging," or changing the date of a debt to keep it on your credit report for many, many years.

Re-aging happens when your account is charged off by your original creditor and sold to a collection agency. The debt collector considers your debt a "new" account and reports it to the credit bureau as such. After attempting to collect from you- some are relentless while others try only a few times before giving up- they charge off your account and sell it to another collector as a bad debt. Each time the debt is sold, the process is repeated and your credit score is driven further into the red.