Credit Damage Blog

Precedent is a creature of circumstances and power. It does not exist in a vacuum, nor is it rigid.

Damages for impaired credit capacity should be alleged in any personal injury case where credit has been damaged as the result of the tortious acts of a defendant. Some personal injury lawyers argue that they cannot allege credit damages in a personal injury case because there is no precedent supporting the claim in tort. This is sophistry.

Credit damage has been recognized as a valid claim for several decades in California. Only recently, though, has the technology been available to prove the value of credit damage and impaired credit capacity. Thus, for sound legitimate reasons attorneys have not even been aware of the existence of credit damages and have therefore not alleged such damages in personal injury law suits. Now, though, due to the pioneering work of credit expert Georg Finder, it is possible to allege and prove credit damage.

The argument that there is no precedent and therefore we cannot allege a claim for impaired credit capacity is circular and specious. After all, no one can doubt that precedent changes. A first year law student can tell you that. There is always a context for precedent and when circumstances necessitate change, precedent changes. This includes the development of precedent where there has been none. Think about all of the recent changes in technology which have required new and developing law, some of it statutory and some of it by courts of appeal which have handed down new and clarified precedent.

Circumstances have changed regarding credit damages. The methodology for proving the value of credit damages exists. If a trial court dismisses a claim for credit damage, an appeal can successfully be taken and new and necessary precedent will follow. Since credit damage is recognized in California, failure to bring the allegation, even lacking specific tort-related precedent, may subject you to a claim of malpractice. You don’t need to be a hero to make the allegation. The desire to be safe can suffice.

For more information, please visit the Credit Damage Expert where your questions about damages for diminished credit in general and impaired credit capacity in particular can be answered.

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Damages for ruined credit may be sought in many cases. You may not know it, but as early as 1912 credit damages were recognized by the courts. In recent years, after the methodology was developed by Georg Finder, credit damages have been measured, provable and substantial settlements and verdicts have been accomplished.

Have you ever heard a lawyer say something like this? “You’re kidding, I wish I had known about that before!” That’s an embarrassed lawyer staring a malpractice claim in the face. So that never has to be you, you want to make sure to investigate and seek credit damages in appropriate cases.

Exposure to malpractice where credit damage is an issue most likely to occur at one of four different stages of a case:

• Failure to ascertain the necessary information from a client;


• Failure to properly ascertain the value of credit damages;


• Failure to retain a consultant or expert witness to save a few dollars prior to negotiation or resolution;


• Failure to utilize the work product of a credit damage expert.

Proper investigation to determine the possibility of a claim for credit damages requires exploration of credit damage factors during an intake interview or in preparing responses to interrogatories. You may have to explain to your client why you are asking about such sensitive, seemingly personal, information as credit problems. Bear in mind that for many people, credit problems are terribly embarrassing, a subject to avoid. It is your job to make them comfortable enough to provide you with the information you will require. For suggestions about conducting the credit damages part of an intake, see CreditDamageExpert.com.

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To successfully litigate a case with compensable credit damages requires the assistance of a qualified expert. What can you expect when you first contact an expert?

The first time you contact an expert, you will probably arrange to exchange basic information. Almost certainly you will be interested in the expert’s qualifications and fees. A reputable expert will send you an email or a fax containing all the information you need.

The expert will want the following information from you:

• Your name and name of law firm


• Name(s) of victim(s) and potential defendant(s)


• All of your contact information, such as phone, fax, email


• Which side you represent


• When you need to designate an expert

It is human nature to be curious about the value of credit damages and the probability of recovery of measurable credit damages from the outset. The reality is that an expert won’t discuss that with you until you have retained the expert. Knowing your CreditDamageScoreFinder© score can be sufficient information about the strength of your credit damage claim to allow you to decide whether to proceed with the claim and whether to employ the expert.

More information about the expert and what you can expect should be available from a expert’s web site. For an excellent example, see the information made available by Georg Finder, the preeminent credit damage expert.

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The complementaryCreditDamageScoreFinder© is an efficient professional tool designed to help you ascertain the likelihood of recoverable credit damages. Based on the information input in eight different categories, the CreditDamageScoreFinder© will generate a score informing you of the potential significance of credit damages in your case. The score will guide you to the next actions to take in regard to your credit damage claim.

It is critical that when the CreditDamageScoreFinder© resulting score is 11 or higher you contact a credit damage expert. One of the basic malpractice prevention steps to take in a case with a possible credit damage claim is to ascertain the most complete actual estimated value of the case possible with the information you possess. The greater the potential value of the case as indicated by the Credit Damage Score Finder©, the stronger is the imperative to contact an expert as soon as possible.

Even when the CreditDamageScoreFinder© result is lower than 11, it is crucial to continue to monitor the possibilities of credit damages. It is advisable to utilize the CreditDamageScoreFinder© as new factors indicating credit damage are revealed. Failure to do so, may result in leaving money on the table when settling or trying the case. Worse yet, the result may be a malpractice claim against you.

To learn more about the services offered by a credit expert, go here .

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Credit damages can be substantial and range from thousands to hundreds of thousands of dollars. Failure to investigate or seek credit damages may be legal malpractice.

You probably want to avoid making this statement sometime down the road: “Gee, I didn’t know that was possible!”

Use of credit reputation in the form of credit reports has become a fact of life. When credit is damaged, it becomes more costly or entirely unavailable, that constitutes a substantial economic loss and hardship. When credit is injured as the result of the misfeasance or malfeasance of another, special damages for ruined credit are as available as any other form of special damage.

The proven methodology now exists to place a dollar value on that loss and such damages can be extensive. It is absolutely critical, therefore, to conduct the necessary investigation to determine whether there is evidence of credit damage and then to seek damages for those losses in any litigation where evidence supports the claim. Failure to do so may give rise to a claim of professional negligence.

For information on how to make sure you don’t risk a malpractice claim, you can utilize the CreditDamageScoreFinder© , now available at no cost.

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Credit damages have been recognized by the courts since 1912 and now the methodology exists to plead and prove them. You certainly don’t ever want to exclaim, when being told that you could have recovered substantial damages for ruined credit, “Oh, my, I never even thought of that!” If you do, you may have to defend yourself against charges of legal malpractice.

Legal malpractice occurs when an attorney commits an error that a competent attorney exercising a reasonable standard of care would not commit. Until recently attorneys have been hamstrung in efforts to seek credit damage compensation because of the difficulty of measuring such damage. Without the ability to prove credit damage, it was not malpractice to fail to seek credit damages.

Since 1995 Georg Finder developed a system to accurately calculate credit damages, judges have permitted plaintiffs to proceed with claims for credit damages over defense objections. Juries have awarded substantial amounts for ruined credit. A reasonable standard of care requires that credit damages must be sought in all appropriate cases. A competent attorney must therefore be careful not to be exposed to the risks of professional malpractice claims by overlooking the potential of credit damage claims.

A tool to aid you in that investigating the likelihood of recoverable credit damage is a downloadable check-list, the Credit Damage Measurement Score, a check list developed by Georg Finder. The check-list covers eight areas of credit and potential credit damage and is available for download at no charge. More important information about credit damage can be found at CreditDamageExpert.com.

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Credit damages can be an important and extensive form of damages in more than 14 types of tort actions. Credit damages may not jump out at you at intake because your client may be too embarrassed to tell you about credit problems or your client is not yet aware of credit problems or nothing has yet been documented which would indicate the possibility of damage to credit.

Frequently credit damages are only revealed sometime after you are retained and as the case develops. It is therefore crucial that you or your staff monitor the case for potential credit damages, so that potential credit damages will come to your attention in a timely fashion and are included in special damage claims.

You are probably wondering how to determine the potential extent of those damages in a given case. A tool designed to assist you in identifying the potential value of credit damages is the CreditDamageScoreFinder© developed and made available by Georg Finder.

It is absolutely imperative to evaluate the potential value of credit damages so as not to overlook a significant, in some cases the most significant, element of damages in a case. A step by step analysis should be utilized to make sure that nothing is overlooked. To better understand what you will need to assess the viability of your credit damage claim, access the CreditDamageScoreFinder©.

When you look at the 8 areas of inquiry of the CreditDamageScoreFinder©, you will understand what information you will need to evaluate the credit damage aspects of your case. Thus, for example, you will have to obtain information about credit cards, mortgages, vehicles, and lines of credit.

Completing the CreditDamageScoreFinder© requires information about the credit history of your client, ideally during the initial intake interview. It is likely that during the intake interview, using the Credit Damage Measurement Score check-list, you will learn of the credit documents that your client will have to provide you.

It is also critical to obtain a commercial or subscriber credit report available for a small fee from any of the three credit agencies. Commercial credit reports are used by lenders in making determinations about credit availability to an individual and at what cost. They are distinct from the inadequate credit reports readily available at no charge upon request. Without the information contained in the commercial credit report, it is difficult, if not impossible, to see the true picture of credit status. Additionally, the commercial credit report will be one of the tools used by the expert who will calculate the value of the credit damages.

Calculation of credit damages requires the services of an expert in the field. The expert will consult with you regarding the potential value of the case. If the expert determines that there is sufficient value to make credit damages worth pursuing, a variety of services and products will be available, ranging from a detailed report of the value of the credit damages to testifying at trial.

The leading expert is Georg Finder. To learn about the services Finder offers and how to substantiate a claim for credit damages, please go here.

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The CreditDamageScoreFinder© is the most important tool available for determining whether you have actionable credit damages in a personal injury or wrongful termination case. The score obtained will indicate one of four different possibilities:

• 0 – 5: Credit damage case is marginal; continue to monitor for more indications of credit damage.
• 6 – 10: Significant credit damage is likely; begin to assemble documents; obtain fresh commercial credit report.
• 11 – 15: There is definite measurable credit damage; contact credit damage expert.
• 16+: Significant credit damage; retain credit damage expert immediately to include credit damages in damage demand.

Understanding the information utilized to obtain the score will help you understand the elements of credit damage.

The CreditDamageScoreFinder© for personal injury and wrongful termination cases calls for information in eight areas:

• Lost Earnings
• A minimum of 6 to 8 weeks of lost wages or equivalent commissions will be necessary in most cases to trigger the likelihood of a credit damage claim.

• Conversion of Funds to Maintain Lifestyle or to Make Payments
• The necessity to prematurely dip into retirement funds, borrow money from friends or relatives, or divert money from cash flow to maintain lifestyle or make payments are all indications that a credit damage claim may be viable.

• Mortgage
• Late payments, denial of a mortgage to purchase property, and denial of an application to refinance are all indicators of credit damages.

• Credit Cards
• Cancellation of a card or cards, increased interest rates, and lower limits all reveal credit damage.

• Financial Relief
• Filing for bankruptcy, discharging debts in bankruptcy, and utilizing the services or a credit counselor can all reveal credit damage.

• Insurance
• If a policy is cancelled, rates are adjusted or renewal is denied demonstrate credit damage.

• Line of Credit
• Refusal of credit or a home equity line, refusal of refinance or upward adjusted interest rates are signs of credit damage.

• Accounts in Collection

The CreditDamageScoreFinder© is a powerful tool to enable you to evaluate the next steps to take in regard to making a claim for credit damage. You will probably want to wait two months from the date of injury, while the elements of credit damage are developing, to utilize the CreditDamageScoreFinder©. Even then a low score may only signify that still more time will be necessary to allow the indicators of credit damage to develop a higher score. On the other hand, bear in mind that even a high score is only indicative of the possibility of substantial credit damage. Only the analysis provided by a credit damage expert can be definitive.

For more information visit the web site of the credit damage expert, Georg Finder.

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Special damages for credit injury can add great value to a case. Knowing that damages are available for loss of credit capacity and diminished credit expectancy might lead to inclusion of a claim for credit damages as a routine matter. Just as wage loss or reduced earning capacity are not routinely part of every legal action, credit damages must be alleged only when appropriate.

Let’s look at situations where it would be inappropriate to include a claim for credit damage. There are two important scenarios. The first instance is where credit damage is self-inflicted, not the result of the wrongful action of another. The second is where credit damage may exist, but it is too small to make a significant impact on the value of a case..

Self-inflicted credit damage is readily apparent in most cases. Credit damaged as the result of poor budgeting or poor planning is self-inflicted. Inability to meet credit obligations because of overextending is self-inflicted. It is true, the credit industry deluges us with sweet sounding offers for credit. It is not the fault of the industry that we accept those offers and then find ourselves in unsolvable debt.

The more complicated scenario occurs when the wrongful act of another causes injuries. An apparent example is the automobile accident where the injured person is unable to work and loses income. Credit damages appear certain on the face of it. It is important in this situation to ascertain credit history. If the history shows that prior to the injury credit obligations were not being timely met, credit damage could not be the fault of another. The credit damage was self-inflicted.

The second scenario where it may be unwise to seek credit damage is where the impact on credit is small. Georg Finder, the preeminent expert in the field, writes, “My policy is to accept any case only if I affect the value of fair compensation by at least $30,000.” The same automobile accident occurred. Physical injuries were sufficiently minimal that missed work and lost wages were relatively small. There was some difficulty meeting credit obligations, and agreements were made with creditors to temporarily make payments covering only interest. After returning to work, credit obligations were again made. In this case there would be little, if any, measurable credit damage.

Another scenario is that of the victim who has little credit history and credit damages are minimal. A judgement call has to be made to determine whether to pursue a claim. If it appears that the cost of the expert who will determine the value of the damages will be greater than the damages themselves it is probably prudent to forego the claim. Georg Finder will not accept a case if he cannot improve its value by $30,000. That alone is a consideration in determining whether to pursue a smaller credit damage claim.

The injured person need not have perfect credit in order to qualify for credit damages. If it can be documented that the person has credit, although less than perfect, and that credit is diminished as a result of the wrong of another, a case for credit damages can be made. The critical inquiry is whether the injured person’s credit status was changed detrimentally as the result of the wrongful act of another. An injured person might have substantial credit damages even without perfect credit at the time of injury.

A tool which is available to assist in determining the value of credit damages is the Case Qualifying Profile made available by Georg Finder. The Profile can be found at www.creditdamage.com/case_profile.html.

If you want to know more about whether to pursue a credit damage claim, please see www.creditdamage.com.

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Loss of credit expectancy is one of the four types of credit damage. Like loss of credit capacity, loss of expectancy concerns the ability to obtain and maintain credit after the wrongful act of another damages creditworthiness. Loss of expectancy differs from loss of capacity as it involves predictable and foreseeable future use of credit as distinct from credit capacity which involves the inability to continue to utilize credit as the injured person could before damage to credit.

Creditworthiness is determined by a creditor’s underwriting department which determines the probability that the credit applicant will meet debt obligations in a timely fashion. Someone who is deemed likely to satisfy debt obligations is creditworthy while someone who is more likely to default is a greater credit risk and not creditworthy.

Thus someone who is considered creditworthy prior to injury to credit by the wrongful act of another and not creditworthy after occurrence of the injury has suffered credit damage. Such damage will result in either diminished credit capacity, diminished credit expectancy, or both. Credit capacity concerns the decrease of available credit and the inability to use credit at the same interest rate, thus at a greater cost.

Credit expectancy is concerned with the performance based expectation of obtaining credit to maintain an attained lifestyle or to accomplish the life style to which one aspires. In other words, credit expectancy can be seen as a window of opportunity to advance goals. When credit is injured, that window of opportunity is slammed shut.

Expectancy is typical in human life. A college student expects to obtain future employment when a degree is attained. A medical student expects to become a doctor. Or a law student expects to be a lawyer. Similarly a person with a history of creditworthiness expects to be able to use credit in new and additional ways with increased credit availability and at a lower cost. This is credit expectancy.

When a pattern of credit use is interfered with that person’s expectation of continued credit or greater credit might be damaged. One illustration is the real estate investor who has a history of purchasing six properties per year for improvement and resale at a profit. Credit problems occur and the investor finds it impossible to obtain new credit to finance the purchases of property. The reasonable and foreseeable expectation of obtaining credit to finance a future enterprise has been dashed and the investor has been damaged accordingly. The window of opportunity has been broken. When the loss of credit occurs as the result of the wrongful act of another, credit damage has occurred in the form of loss of credit expectancy.

Other reasonable expectations which a person with a developing history of creditworthiness might envisage is the purchase of a first or new home, a new car, or credit cards with higher limits and lower interest rates. When creditworthiness is diminished and the window of opportunity is closed, those expectancies will be dashed and unattainable. That is the crux of damages for loss of credit expectancy.

It is likely that when credit damage for loss of expectancy is alleged the objection will be made that credit expectancy, something to occur in the future, is speculative. That issue can be met and overcome in the same manner that a similar objection to damages for diminished earning capacity is met with the testimony of the injured party and testimony of a qualified expert. The person whose credit has been damaged can testify about plans to utilize credit. Expert testimony concerning statistical evidence showing how credit is used by people similarly situated to the injured person is admissible.

To successfully recover credit damages for the loss of credit expectancy requires the services of a qualified expert to address the economic loss for damage to expectancy. Georg Finder is such an expert who has qualified as an expert witness in State and Federal courts. To learn about how Georg can assist you, please see http://www.creditdamage.com.

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Credit damage is the impairment of the ability to use credit as the result of the wrongful act of another. Credit damages can consist of different elements.

Those damages can be for (a) loss of credit capacity, (b) loss of credit expectancy, (c) cancellation of credit, and (d) increased cost of borrowing. In most cases one or two of the different types of credit damage will be involved. This entry will focus on loss of credit capacity.

Loss of credit capacity, refers to the decrease of available credit and/or an increase in the interest rate for available credit, thus an increase in the cost of credit

As a result of those increased costs debt service becomes more expensive. When debt service becomes more expensive, loss of credit capacity is suffered as the injured person loses the ability to continue to use credit in the way it could be used before the damage to credit occurred.

Three examples illustrate how credit capacity may be damaged.

The first example is the ubiquitous credit card limit. In this example the injured person had a credit card limit of $100,000. After the injury occurred, the credit limit was lowered to $20,000. Thus, the credit capacity of the injured person decreased by $80,000.

The second example involves the ability to borrow against the value of real property. In this example prior to injury the injured person could borrow up to 90% of the value of property. After the injury occurred, the amount available was reduced to 70% of the value. Thus, the amount of money which could be borrowed was reduced. Additionally, when credit is damaged, the interest rate increases as well, so not only was the amount of credit available reduced, but the cost of borrowing that amount increased, making it more expensive to borrow against the value of the real property. Thus, credit capacity was decreased by the 20% reduction plus the increased cost of borrowing.

The third example involves the purchase of a motor vehicle. In this example prior to injury a person with excellent credit can walk away with a new car paying nothing down. After injury and damage to credit, the same person might have to make a down payment of 15 or 20% of the value of the car and be subject to a higher interest rate on the balance due. Thus the amount of credit available decreases and the cost to manage the debt increases, a loss of credit capacity.

Additionally, in the unlikely event that new credit can be obtained after credit damage occurs, the amount will certainly be less than would have been the case before credit was damaged. On top of that, higher interest rates and monthly payments will be required. In other words credit won’t be as affordable as it was before the injury, a significant loss of credit capacity. All of the above examples reflect a loss of credit capacity. The amount of credit available will have decreased as a result of the damage to credit. The cost of that credit will have increased, making available credit more expensive as a result of the damage to credit.

Compensation for loss of credit capacity is available and should be sought in any case when the damage to credit is caused by the wrongful act of another. To obtain that compensation requires that a qualified expert be retained. The pioneer and leading expert in the field of compensation for credit damage is Georg Finder. To learn more about what Georg Finder can do to strengthen your case, see http://www.creditdamage.com.

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Credit damages can be a tremendously significant part of the damages, as much as $100,000 or more, in a law suit. Georg Finder writes, "It is my policy to decline cases where my service will not impact the valuation by at least $30,000. Typically my contribution improves a case by over $75,000."

Credit damages may result if a victim suffers any of the following: cancellation of credit, increased borrowing costs, loss of credit capacity, or loss of expectancy. Those adverse events will occur when a person is unable to meet credit obligations and creditors provide negative reports to credit agencies. Prospective creditors will utilize those negative remarks in deciding whether to grant credit at or, if they will grant credit, in what amount and at what interest rate.

A credit score is intended to rate the probability that a borrower will default on a loan. It is based on several factors including payment history, outstanding debt, length of time one has had credit, the number of inquiries on your report, and on the types of credit you currently have. The first two factors are by far the most heavily weighted in calculating a credit score. In Sandy’s case we can infer that, as Sandy becomes unable to meet credit obligations, the payment history will deteriorate and the outstanding debt will increase causing a decreasing credit score.

Over time Sandy’s credit report will contain more negative reports. Sandy can therefore expect that it will be more difficult to obtain credit (loss of credit expectancy), that when credit is available, it will be for less (loss of credit capacity), and the interest rate (cost of credit) will increase. Sandy may also lose credit cards or otherwise existing credit (cancellation of credit).

It almost becomes a matter of common sense that if one’s credit is damaged as the result of the wrongful act of another there should be compensation. The remaining question becomes how much compensation is appropriate. The answer can be determined by someone qualified to analyze a credit report and the negative reports found therein and who understands the implications of a credit score. These are not mere numbers which can be plugged into a calculator to elicit a dollar amount of damages. To reach that figure requires an expert. One expert is Georg Finder, a recognized authority in the field.

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