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Credit got damaged? Now getting compensated for your loss

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Credit got damaged? Now getting compensated for your loss
Lawyers for the victims of credit damage have very limited possibility to collect for damages beyond medical treatment, property loss and lost wages. Insurance companies will only offer sympathy, claiming the victims can only be compensated for what can be measured in terms of tangible goods and services. But, what happens when the victim has lost quiet some time from work, the family bank is nearly broke and monthly payments on mortgages, car loans and credit cards payments are at the verge of being missed? Regardless of all the back and forth between lawyers and insurance companies, it is the credit victim who has to live with a bad credit rating.

The procedure of Credit Damage Measurement (CDM) is a legally accepted means for measuring loss of credit. CDM is a good potent tool for recoverable credit damage awards when the credit damage is not self - inflicted. Previously, both the judge and jury, and needless to say the insurance companies, refused to acknowledge CDM claiming that the CDM was speculative because they could not define it as a tangible damage. However, in recent cases, victims of credit damage who use the CDM methodology are getting compensation for credit loss. Many recent factors are changing the old mindset including credit bureau technology improvements, the application of the Fair Credit Reporting Act (FCRA), risk scoring sophistication and the development of CDM as a repeatable method that measures out - of - pocket damage reliably.

Credit Ratings and Recovery

The impact of a bad credit rating can be quiet significant than most people think. Poor rated consumers will face problems when they want to lease or buy vehicles, apply for credit cards, buy / lease / refinance their residence. In most cases, it is a quick and easy decision for the creditor: the credit application from the borrower is simply turned. In other cases the borrower is charged a much higher down payment which maybe hundreds of dollars more than otherwise.

"A person with bad credit is constantly viewed with suspicion and is charged significantly more for future extension of credit because the lender feels the need to protect against a greater risk or default," says Tom Key, a civil litigator practicing in Tustin, CA.

"Over the years I have heard reports of financial damages from clients who have been wrongfully terminated, defrauded, injured in an accident or suffered losses from breach of contract," Key says. "These victims were especially distraught over the fact that their prime credit reputation, carefully nurtured for years, is destroyed overnight. It seemed to me that there must be a way to compensate victims for that type of loss."

Key has also witnessed the reactions of many jurors who have failed to award a victim of credit damage their rightful compensation simply because they could not quantify the damages. "Jurors want a specific loss that they can count, hold and see" says Key. "Their reasoning is that they need to know that it is genuine. They have a tough time awarding damages based on sympathy. In order for them to confirm authenticity of a claim, they want to see its quantification."

Measuring Loss of Creditworthiness

Assuring authenticity has been a difficult situation when it concerns measuring out - of - pocket loss for victims of credit damage. Attorneys who have represented victims of credit damage are now utilizing the Credit Damage Measurement method described above to recover out - of - pocket losses for their clients. "CDM measures the actual out - of - pocket dollars reasonably expected from loss of creditworthiness, which includes higher down payments, higher interest rates, higher points and costs on loans, higher monthly payments, or an outright denial of credit" says Key. In addition, the CDM method also calculates the rates, costs and other terms applicable to the resulting credit rating by lenders and projects the results over the relevant number of years for the types of loans the client is likely to seek.

Tom Key continues, "For example, if a client's credit was almost perfect before the ominous event, and is subsequently damaged by the event, the CDM procedure can provide before and after analyses, calculating the cost of the same loans with the two different credit reports, Pre - injury credit compared to Post - injury credit. In many cases, CDM clients have already realized significant compensation. In one such case CDM was instrumental in recovering $56,000 for damaged credit reputation. That calculation is the difference between what refinancing a $140,000 loan would have cost the client with their prior rating, and what it will cost them out - of - pocket with their damaged credit rating measured over a seven-year period.

Isolated Compensation vs. Repeatable Compensation

The CDM method for measuring intangible credit loss is now increasingly becoming the basis of recovery for the victims of credit damage. It is changing the way judges and juries measure recoverable out - of - pocket loss, and then can compensate for loss of credit expectancy. Technically the credit damage measurement is intangible. However, CDM has proven a practical procedure to calculate out-of-pocket damage for companies or families to compensate for their credit damage.

"To have this kind of measurement is an exciting complexity in our society" says Tom. CDM is a simple way to come to a conclusion of loss for the victim. If you understand the math and are an expert at reading credit reports, the recovery is undeniable. It is a method of turning isolated compensation into repeatable compensation. CDM is changing the way jurors rule on these damaging cases. Because of the CDM method, victims of credit damage can be more fairly and more rightfully compensated for out-of-pocket damage.

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