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Another Approach to Managing High Risk Customers

By using improved modeling and customer management strategies to target “At Risk” customers, progressive financial service companies can reduce credit losses by decreasing their portfolio’s overall “At Risk” exposure levels and by helping customers before it is too late. By proactively establishing contact with these customers before they reach their highest stress point, companies can work with them to identify potential internal and external options that will help them through an often confusing and difficult time.

This approach helps companies reduce delinquency in the early stages, and that is critical because customers who historically roll to more than two payments delinquent are 50% more likely to charge off than those customers who do not. More importantly, organizations can prevent full utilization of the customer’s credit line by proactively reviewing “At Risk” current customers at pre-defined utilization levels, thereby reducing the overall delinquent dollars entering collections.

Based on decades of experience in credit risk management and collections consulting, we prepared this white paper, Another Approach to Managing High Risk Customers, to help identify “At Risk” customers, develop strategies to address “At Risk” customers and manage those customer strategies.

[2016 Comment] While this white paper was published over 5 years ago in 2011, the principles outlined are very applicable in today’s environment, however, the manual strategies and processes outlined may be less focused on placing outbound calls and more focused on utilizing digital channels to assist “At Risk” customers.

Category: Default Management