Can I Get Compensation from a Poor Credit Rating?

| April 23, 2015 | 0 Comments


A credit score is said to be bad or poor when it keeps a person from achieving whatever they are trying to accomplish. It may either be to refinance a loan, borrow at a lower rate of interest, or maybe a better deal on his auto insurance. So a person may worry about if and how they can get compensation for a poor credit rating that may have led to credit loss.

Credit scores developers do not decide which credit scores are “good” or “bad.”  Neither do the credit reporting agencies that provide the credit reports for the creation of these credit scores. It is solely up to individual lenders and insurance companies to evaluate these scores and decide which one show an acceptable risk level.

Traditionally, credit damage victims had little possibility of being compensated for anything beyond medical treatment, lost wages and property loss. “Compensation can only be for what is measurable”- it was argued, like tangible goods and services. However, it should be considered that the victim may have lost a lot of time from work. The family bank may be broke, and this may lead to monthly credit cards payments, mortgages and car loans repayments being missed. The credit victim will also end up living with a bad credit rating.

Credit Damage Measurement

Legally, loss of credit is measurable through the Credit Damage Measurement procedure (CDM). The procedure is a potent tool for recoverable credit damage compensation if the damage is not self-inflicted. CDM lacked acknowledgement previously because people saw it as speculative. Also, credit damage could not be defined as a tangible loss. However, victims of credit damage who use the CDM method currently get compensation for credit loss.

Factors that have facilitated the compensation for poor credit rating include:

  • Improvements in Credit bureau technology
  • Credit Reporting laws application
  • Sophistication of Risk scoring
  • Development of CDM as an objective and repeatable method that can measure out-of-pocket damage reliably.

Credit Ratings and Recovery

The effect of a bad credit rating is much more pronounced than most people think. Poorly-rated consumers face a hard time when they are leasing or buying assets, trying to obtain credit cards, and also during buying, leasing or refinancing their residence. It may be an easy decision for the lender to turn down the credit application or charge the borrower a much higher. Lenders will always feel the need to protect against a greater default risk and hence the higher costs for future extension of credit. Financial damage is common in people who get wrongfully terminated or defrauded and hence suffer losses due to breach of contract. The destruction of these victims’ spotless credit reputation may occur overnight. It is only fair to compensate such a victim.

How to Measure Loss of Creditworthiness

Victim’s authenticity needs verification before they can get compensation for a poor credit rating. Credit Damage Measurement method has to be used to recover out-of-pocket losses for these victims. CDM measures the actual out-of-pocket amount reasonably expected from loss of creditworthiness, such as higher down payments, higher loan points and cost, increased interest rates, higher monthly payments, or complete denial of credit. The method can calculate the rate, cost and other terms that will be applicable to the resulting credit rating by lenders. It can also project the results over the relevant number of years for the particular types of loans the client may seek.

Learn more about how to get compensation from a poor credit rating by visiting:









Category: Business and Politics

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