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Credit Report Mistakes Costs Family Thousands of Dollars in Mortgage Payment

By Faye Mergel
Published: Wednesday, December 30th, 2009

A Manitoba family has done everything right in paying their dues to a financing organization. However, the credit report error made by the company has cost them to pay thousands of dollars more on their mortgage loan, making their Christmas bleak when it should have been jolly and gay.

Credit Report Mistakes Costs Family Thousands of Dollars in Mortgage PaymentNancy Klassen sought financing for a GM minivan several years ago and was able to pay it off in June 2008. However, when they tried to refinance their home, they found out that there was no such thing as a low interest loan available for them. Instead, the only mortgage financing available carries no less than a 15 percent interest rate. Now, they are paying $1,500 more than the rate they actually deserve for being good borrowers.

The Klassens know about the costs of not paying as they have agreed with their creditor. That is why they paid their dues every month, and paid them early. However, GMAC Financial reported to bureaus that there were arrears on their car payment. Because of the damage done on their credit report, a low interest loan is something they will not be getting soon.

After months of correspondence with the finance organization, GMAC Financial finally admitted that it made errors, but will not compensate for the Klassens’ losses until they are able to secure a different mortgage.

However, Nancy fears that the company’s proposal will have no bearing to them if they are not able to get a different mortgage.

So far, the Klassens has paid $935 for its current mortgage, but the family is worried that a foreclosure will be knocking on their door soon if they are not able to come up with the rest of the payment. A foreclosure would mean another huge black mark on their credit report, which is an additional burden to their already scorched financial life.

The family hopes that they can get a different mortgage in the next few days in order to avoid losing the home they have been living in for the last 16 years.

GMAC Financial recently fixed the credit report error, but did not announce yet how they will compensate to the Klassen family.

The Klassens are not alone in their woes. Specialists note that many consumers are paying higher interest rates because of credit report mistakes creditors make. To avoid having this same problem, financial adviser Yvonne Neu says consumers must check their credit report even before needing to get a loan.

Consumers are advised to pull out their credit report from all of the major bureaus to make sure that none of them contains any error.

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