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Don't know what to do about a companies error lowering my credit score

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New Member

Don't know what to do about a companies error lowering my credit score

Hi guys i have an issue that is occuring right now and don't know what to do. 

Here is the gist..

I pay for my car insurance every 6 months. I switched to Allstate on April 24th. i have a BMW 328I. I sent the registrtation to the guy to get a quote for my car prior to changing from AAA to Allstate. I use to own a 2011 BMW and traded it in in Dec 2015. My car has been insured ever since i got it. My car is financed through Dexsta credit union. When i changed insurance, Dexsta reached out to me an and asked me to upload new insurance information. i did that and figured everything was ok. I never ever missed a car payment with Dexsta and they have financed my last 3 cars. It was a shock to me when i get a letter in the mail saying i had missed my payment. Come find out my car payment jumped $400 higher becuase they said i didnt have insurance and they had to get Allied to provide insurance. We went back and forth for a while and I had the Allstate send me another letter stating my coverage. I uploaded it again and sent it to Dexsta to clear up the mess. they said they recieved it and we were good. The next month, i get another late payment notice saying i still owed a balance. I called Dexsta again and they reviewed my file and said it was in the system just give it a minute to clear out. Cool. The next month came and I recieved another letter. I then went in to the branch with papers in hand and talked to a manager and she said give it a little more time everything looked right. I go home and a few days later Dexsta collection ppl call me and said they called me because i am past due . I explain to her what is going on and she looks in her system and dont understand why it was still happening. She said she would call me back and look into it. She calls me back a week or so later and says she fouf the problem. Allstate insured my old BMW not my new one. So for 6 months i paid my car insurance for a car i traded in back in Dec 2015. So i call Allstate and they change my policy and it went into effect the day i had to renew my insurance but they called Allied insurance and told them it was their error. So my car payment is back to normal but with my late payments and missed payments, it dropped my credit score almost 100 points.. Thursday i recieved and email from Discover card saying there were changes to my credit score and they had to decrease my credit limit. Sunday American express emails me and they reviewed my credit score and cut back on my credit spending from $15k to $9k. Today i check my credit and because my credit limits decreased, it made my credit usage very high and i dropped 30 more points today. Now i worked hard to clean my credit when i bought my home and maintain it to where i have a clear clean on time credit.. Now it is shot all because of what happened an error on Allstate and Dexsta part. Dexsta said they will go in the system and remove the lates but the effect are already out of this world... Let alone i paid insurance for a car i didnt own... WHAT CAN I DO????? 

Message 1 of 8
7 REPLIES 7
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Established Member

Re: Don't know what to do about a companies error lowering my credit score

Smiley SurprisedThis is definitely gonna require a response from a more seasoned myFICO'er. Sorry to read of your calamity...

 

Filed: 9/15 | Meeting: 10/15 | Discharged: 12/15
Auto Loan: 12/15 - $21,500 | Cap1Plat: 01/16 - $1K
Message 2 of 8
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Frequent Contributor

Re: Don't know what to do about a companies error lowering my credit score

What do you mean "Allstate insured your old BMW" ? You input the VIN of the new car when you add a new car so im honestly not sure how that could happen unless you didnt "add" the new car.  

 

What I would do is, work on getting the lates removed and keep everything documented. Then, when your reports are clear, call discover and Amex and ask for reinstatement of credit limit. This will take some months to work out.  Id just be glad I didnt get in a wreck when you didnt have insurance. 

 

Did you never check the VIN number on your policy? thats the first thing I would have looked at if the lender was saying I had no insurance on their collateral. 

 

 

807 TU FICO Score 8.
Message 3 of 8
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New Member

Re: Don't know what to do about a companies error lowering my credit score

 I was insured with AAA first. I traded in my 2011 BMW in dec 2015 to a 2012 BMW same model 328i. Allstate reached out to me and said they can lower my insurance so in April 2016 i switched to Allstate. I emailed the agent my regisration of the BMW 2012 i had. I didn't even check the vin just saw it was a bmw 328i on  insurance paper. Come find out, when I talked to the Insurance agent, he said it was their error. Instead of looking at the registration i sent them, they pulled up my name and saw a BMW electronically and used that one..... But the problem more or less arose when i submitted the paper work to ALLIED insurance (the insurance company of my finance company Dexsta) They never reached out to Dexsta and told them it was wrong. I also sent the information personally to Dexsta and they said i was fine and the extra insurance should drop off. So for 3-4 months Dexsta kept saying in was fine with the insurance unitl my account was seriously pass due. I kept making my regular payments but i didnt pay the extra $400 they wanted for their insurance and they were aware of that. They kept telling me i should get credited until their collection department called me and they did their own investigation to realize it was the wrong car insured on my insurance. Mind you, Dexsta financed BOTH of my BMW's so they were probably confused as well. It took them 3 months to realize the issue and their reasoning was that they dont communicate a lot with ALLIED insurance and why there was an error. so I am down 138 points on my credit score and my credit utilization is higher.. iTS A TRICKLING EFFECT THAT IS RUINING ME

Message 4 of 8
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Frequent Contributor

Re: Don't know what to do about a companies error lowering my credit score


@Devin302 wrote:

 I was insured with AAA first. I traded in my 2011 BMW in dec 2015 to a 2012 BMW same model 328i. Allstate reached out to me and said they can lower my insurance so in April 2016 i switched to Allstate. I emailed the agent my regisration of the BMW 2012 i had. I didn't even check the vin just saw it was a bmw 328i on  insurance paper. Come find out, when I talked to the Insurance agent, he said it was their error. Instead of looking at the registration i sent them, they pulled up my name and saw a BMW electronically and used that one..... But the problem more or less arose when i submitted the paper work to ALLIED insurance (the insurance company of my finance company Dexsta) They never reached out to Dexsta and told them it was wrong. I also sent the information personally to Dexsta and they said i was fine and the extra insurance should drop off. So for 3-4 months Dexsta kept saying in was fine with the insurance unitl my account was seriously pass due. I kept making my regular payments but i didnt pay the extra $400 they wanted for their insurance and they were aware of that. They kept telling me i should get credited until their collection department called me and they did their own investigation to realize it was the wrong car insured on my insurance. Mind you, Dexsta financed BOTH of my BMW's so they were probably confused as well. It took them 3 months to realize the issue and their reasoning was that they dont communicate a lot with ALLIED insurance and why there was an error. so I am down 138 points on my credit score and my credit utilization is higher.. iTS A TRICKLING EFFECT THAT IS RUINING ME


Ok, so from what I can tell. This issue is Allstates fault. 

 

All your lender knew was that their collateral was not insured and thus took steps to insure their own property. I would say those ALLIED insurance charges were warranted given the fact that allstate did not insure your car. So youll need to pay for those $400 charges unless Allstate pays for it.  Think about it, had you totaled the car and Allstate not paid out, how does the the lender recoup their loss? They must have insurance if you dont. 

 

Unfortunately, the responsibility ultimately falls on your shoulders to make sure your car is insured. You MUST always make sure your insurance info is correct. NEVER assume anything. I would never just let the agent do it without double checking their work.

 

Like I said earlier, you need to get the lates off and document everything. Then call up Discover and Amex (and whomever else) and explain. Unfortunately, it is what it is, a really bad situation in which you ultimately got burned. Good luck. 

807 TU FICO Score 8.
Message 5 of 8
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Legendary Contributor

Re: Don't know what to do about a companies error lowering my credit score

If you wish to assert civil liability for negligence, I would consult an attorney for his/her legal opinion.

Asserting blame and associated liability/damages would require civll action and a finding by a court.

 

While consumers generally have the ability to assert civil liability for willful or negligent noncompliance with provisions of the FCRA (FCRA 616 and 617), that ability does not extend to willfil or negligent reporting of inaccurate information.  See FCRA 623(c).  That right is reserved only to governmental agencies, such as the FTC or CFPB.

 

FCRA 623(c) essentially requries that a consumer first file a dispute of accuracy of reported information, and if the furnisher corrects the accuracy, there is no basis for civil liability. It is then the investigation of accuracy that is required of the furnisher under the dispute procedure that becomes subject to civil liability, and not the fact of the reporting itself.  If the furnisher corrects, there is no basis for civil action over iiability for the accuracy of that reporting.

 

How to deal with liability for reporting of inaccurate information to a CRA would require more than just initiating civil action claiming liability, and should be handled through an attorney.

 

Message 6 of 8
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New Member

Re: Don't know what to do about a companies error lowering my credit score

I figured it would ultimately fall back on me. I contacted Dexsta and they said they cleared the error up on my credit report but it may be a few months before a change hit...

Message 7 of 8
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New Member

Re: Don't know what to do about a companies error lowering my credit score

Thanks Robert, I will look into that. This is really effecting my credit badly and my livelihood because i use my credit for my non-profit and everything else. 

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