Your credit score may just be a number, but the impact this number has on your finances is huge. A low credit score results in higher interest rates, more expensive deposits for utilities or rent, and even being denied credit altogether.
Sometimes, low credit scores are the result of an error that wasn’t your fault. These errors are not uncommon; in fact, one recent study estimated that approximately 42 million Americans have errors on their reports. That’s why a growing number of people are suing to get their credit scores back up. This type of lawsuit not only restores your credit, but often includes a hefty settlement as well for damages suffered.
But before you go to court, make sure there’s a chance you can actually win your case. You can increase your chances if the following situations apply to you:
In order to win your case, you must prove that you suffered some sort of damage as a result of the mistake. Your chances of winning, or of getting an attorney to represent you, increase significantly if your credit was good prior to the mistake in reporting. If your credit was already bad or below average prior to the reporting error, it will be difficult (but not impossible) to prove that the error caused any damage.
The first thing you’ll want to do is make sure the damage was in fact the result of something that a person or company did that ended up damaging your credit. This can be either directly or indirectly. For example, several years many people suffered damaged credit as a result of mishandled loan modifications. The lenders agreed to modify loans and accept lower payments. However, they reported negatively to credit reporting agencies, stating the monthly payments were being paid for less than originally agreed. Because there was proof the loan was modified, they would have grounds for a lawsuit.
It may seem obvious, but in order to collect for damages, you have to prove there actually were damages. Judges award settlements for a number of different types of damage. For example, let’s say the lowered credit score resulted in a higher interest rate for your home. Over time, you end up paying significantly more money each month. Another example of damage is lowered lines of credit, which can happen if a credit card company lowers your credit limit because your score dropped.
Credit researchers or evaluators can increase the chances you have of winning a settlement. These are professionals who determine exactly how much money you have lost as a result of damaged credit.
It’s important that you do everything in your power to have the problem fixed before taking a person or company to court. This includes contacting the creditor and disputing with credit reporting agencies. Make sure you document each attempt, and send all disputes via registered mail. A paper trail can help you in court.
If you’ve suffered damage as a result of a credit reporting error and have unsuccessfully attempted to get it resolved, it’s time to seek help from an attorney. Consumer attorneys specialize in consumer rights, including credit issues.
Before you visit an attorney, make sure you have as much evidence as possible to present to the attorney. Because this area of litigation is not common, most attorneys want solid evidence to bring before a judge.
Suing for damaged credit can be time-consuming, but considering the impact of your credit score, it can be well worth it in the end.