Credit damages is one of the most complicated aspects of any FCRA, FDCPA or credit report related litigation. In the world of credit related lawsuits there is always an allegation of credit damages, but rarely a number applied to said allegations. One of the difficulties is the absence of any generally recognized method of quantifying credit damages, that is to assign a dollar amount to things like credit denials or lower credit scores or allegedly incorrect credit entries.

In credit damage lawsuits, there is no “miles per hour” or “pounds per square inch” type of metric. You can’t simply look at a credit score of, say, 600 and equate some dollar amount to that score. In fact, several courts have published opinions that make it very clear that simply having a lower score does not equate to actual harm. That certainly doesn’t stop some credit experts from assigning large and puzzling “damage” figures in credit damage lawsuits, including those resulting in hedonic damages.

While it’s certainly the Plaintiff’s job, normally via their credit damage expert witness, to assign value to alleged credit damages it’s almost always the Defendant’s credit damage expert witness’s job to assess and possibly offer rebuttal opinions. Those rebuttal opinions can be as complex as deconstructing the Plaintiff’s expert’s damage methodology. They can also be as simple performing a credit score impact analysis to identify what, if any, impact any allegedly incorrect credit reporting had on a Plaintiff’s credit scores.

If the allegedly incorrect credit reporting had no measurable impact on a Plaintiff’s credit score then it begs the question, “where are the damages?” And, the only way allegedly incorrect (and likely derogatory) information would not have any measurable impact on a Plaintiff’s credit score is if there were other unrelated derogatory entries that were already causing a lower credit score.

There is also the issue of materiality when it comes to score impact. If someone’s credit score went from 550 to 540 because of an allegedly incorrect credit entry, what that really a material impact? If someone’s credit score went from 820 to 810 because of an allegedly incorrect credit entry, what that really a material impact? In neither case is a lender’s decision likely to change because of the difference in credit scores.

That still doesn’t stop some credit experts from alleging credit score damages even if there aren’t any. That’s why it’s important to have a credit damages expert witness that has a professional background in not only credit reporting but also credit scoring systems.