Credit Damage: Getting Compensated for Your Loss

by: Georg Finder
Until recently lawyers for victims of credit damage had little possibility to collect for damages beyond medical treatment, lost wages and property loss. Insurance companies threw up their hands in sympathy, claiming victims can only be compensated for what can be measured — tangible goods and services. But, what happens when the victim has lost considerable time from work, the family bank is broke and monthly payments on mortgages, car loans and credit cards payments are missed? Regardless of the haggling between lawyers and insurance companies, it’s the credit victim who ends up having to live with a bad credit rating.

Today, there are legally accepted means for measuring loss of credit through the procedure of Credit Damage Measurement (CDM). CDM is fast becoming a potent tool for recoverable credit damage awards when the damage is not self-inflicted. Previously, both judge and jury, and especially the insurance companies, refused to acknowledge CDM claiming it was speculative because they could not define it as tangible damage. However, in case after case, victims of credit damage who use the CDM method are getting compensation for credit loss. Many 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 an objective, repeatable method that measures out-of-pocket damage reliably.
Credit Ratings and Recovery
The impact of a bad credit rating is much more significant than most people think. Consider what poorly rated consumers face when they want to lease or buy vehicles, obtain credit cards, buy or lease or refinance their residence. In most cases, it’s an easy decision for the creditor: the credit application is simply turned down or the borrower is charged a much higher down payment – maybe thousands of dollars more with monthly payments that are typically several hundred dollars more.
“A person with bad credit is 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 witnessed the reactions of many jurors who 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 sticky situation when it concerns measuring out-of-pocket loss for victims of credit damage — until now. Attorneys who represent victims of credit damage are now utilizing the Credit Damage Measurement method 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 points and costs on loans, higher interest rates, higher monthly payments, or 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.”
Key continues, “For example, if a client’s credit was near perfect before a triggering event, and is subsequently damaged by the event, the CDM procedure can illustrate 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 my 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 of measuring intangible credit loss is increasingly becoming the basis of recovery for victims of credit damage. It’s changing the way judges and juries measure recoverable out-of-pocket loss, and then can compensate for loss of credit expectancy. Certainly there are still some skeptics, mostly defendants. Technically, credit damage measurement is intangible. However, CDM has proven an objective and 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 Key. “CDM is very understandable and a rather 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 calculations and recovery are undeniable. It’s a method of turning isolated compensation into repeatable compensation. It’s changing the way jurors rule on these damaging cases. Because of this method, victims of credit damage can be more fairly and more completely compensated for out-of-pocket damage.”


About the author:
Georg Finder, president of CM Financial Services of Fullerton, California, wrote and presents the first State Bar accepted continuing legal education seminar on credit reports and credit damage. He can be reached at gfinder@creditdamage.com (714) 441-0900 or at www.creditdamage.com


Circulated by Article Emporium

Auto Loan Options for People with Bad Credit

by: Peter Lenkefi
Internet surfers with bad credit looking for an auto loan are bombarded with advertisements most days. Many of these ads are truthful in their bad credit auto loan options. However, there are many things to avoid, and this article will describe some of those.

Directly financed auto loans for people with good credit are a bit different than those with bad credit. People with bad credit are expected to pay more of a down payment as well as a higher interest rate on their auto loans. Many creditors won’t even extend an auto loan to those with bad credit. Depending on how bad someone’s credit is, auto loans can range from a 20 – 50% down payment requirement, interest rates from 5-26%, and amortization (the length of the loan) anywhere from 2-4 years.

This may sound like a lot of bad news for bad creditors looking for an auto loan. But with some good planning and foresight, these auto loans can actually help people with bad debts rebuild their credit history.

The worst situations in bad credit auto loans show up when car dealers artificially inflate the pricing or interest rates on their cars. Auto dealers who specialize in bad credit loans will take a car normally selling for $5,000, inflate the price to $8,000, take a $2,500 down payment and then finance the purchase at 24%. Now the bad creditor will be in debt to the auto loan company for an inflated price that isn’t indicative of the vehicle’s real value. A way to counteract these types of sneaky bad credit auto loan dealers is to check the value of the car you are looking at, first, and then only pay $200-500 extra then what’s listed. Only in exceptional circumstances would you ever pay more than this for a car.

Two different ways of selling a car have emerged recently with the new, Internet economy. The first is called the ‘dealer network system’. Auto purchasers can get a loan regardless of their bad credit history with this option. Essentially, a potential customer looks at a car on a website, and then answers some basic questions if interested in buying. This information is then passed along to a dealer specializing in bad credit auto loans. Since there are no fees involved, this can be a real boon for the bad creditor looking for a decent car loan. However, with this system, there is no way of researching the auto dealership you are about to do business with.

The other new option is called an application service. In this situation, a person with bad credit applies online for an auto loan, and the financial information is then sent to multiple lenders at the same time, with the hope that one or two will be willing to take the credit risk. If the system works, several dealerships with fight for the customer, using price and convenience as their selling points.


About the author:
For more more information about auto loan options please visit http://www.moneytipsdaily.com/Money-Tips/Financial-Advisor-Helps-People-Make-Money-Loaning-Themselves-Money.html


Circulated by Article Emporium

Selling Online for Newbies

Selling Online for Newbies
by: J. Elisha Burke
If you are interested in selling online, it is quite easy to get started. First of all you must have a product or service to sell. This product or service can either be yours or someone else's. If you decide to sell someone's product in an affiliate program, try to know as much about the product as possible.

To get an idea of the type of product you are interested in selling online, you should think about what sort of things you are interested in buying. If you are interested in cars, you can sell anything from model cars to books on cars. You can even provide information on applying for car loans. If you choose a great enough product or service, you can find
many ways to sell this product and would be only limited by your imagination.

After you have chosen a product you must create a website. If you have knowledge of website design, you can have your website up and running in a few hours, or less if you
purchase and use pre-formatted website templates.. However, if you have no idea what to do to even get started with creating a website, you should hire someone to do this for
you.

Depending on the city you live in, there will be local computer stores available that offer website design and hosting. Or if you have a family member or a friend that sells online, you can ask them to recommend someone to you. Your website is important because it will be the first thing your customers see before they buy what you are selling.

If you retain the services of a design company, make sure you buy a web hosting package with enough storage and bandwidth to handle the traffic you will have. You can
ask for feedback from other webmasters who have used the same design company or for feedback on ways to improve your website. Being able to allow customers to pay online and providing customer support is essential as well.

When you have gotten your website uploaded, now is the time to market your website. This part is crucial to the success of your business. You are unable to sell online if no one
visits your website. You can market your website through a number of ways. For example, placing ads in classified sections both offline and online. As well, you can make
brochures and hand out business cards. Also using banner and link exchanges with other high traffic sites can provide quality traffic and increase your business.

Copyright 2005 Burke Publications All Rights Reserved

About the author:
Dr. J. E. Burke, an educator and entrepreneur, has been involved in various business enterprises via his business, Burke Publications for 11 years. Dr. Burke is an educator, writer and motivational speaker on a variety of topics. He is also known for his expertise on nonprofit organizations and grant proposal writing. Dr. Burke can be contacted at http://burkepublications.comor http://news.burkepublications.com