Turning Your Field & Desk Collector Into a Well-oiled Machine
Data is a powerful thing. Starting from Instalment History, Credit Score, until Geographical Collection History is essential to transform your company towards operational excellence, and now is the time for you to automatically determine your collection priority upon task distribution.
The collection Scoring model can help assess the creditworthiness of the borrower, and whether the borrower is eligible or not to be given a loan. The collection scoring model is commonly used for debt collection.
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The collection fee has decreased drastically
The number of non-performing loans can be decreased using collection scoring
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What are Collection Scoring Models?
Collection Scoring is a tool to analyze creditworthiness assessments of borrowers who are in arrears based on the data listed in their credit history. The output of the results will be in the form of a score. The value of this scoring model describes the possibility of borrowers in the next 6 months for debts of 1 – 30 days due. By using this collection scoring, the company can segment its credit portfolio at an early stage to determine priorities and the appropriate collection method to use, and also with collection scoring it can estimate the level of risk that can occur and the provisions of the portfolio account in the future.
The collection management system that is equipped with Collection scoring allows recovering outstanding balances for accounts registered on the collection list. The collection score card can predict the statistics of the availability of the debtor to pay and also see the ability of the debtor likely to pay the loan so that it can help determine the decisions to be taken and what to do in increase collections. The following are some of the advantages of using collection scoring:
1. Assessment is made easier because it uses a collection decision-making system 2.The niche model is more appropriate in classifying borrowers who like or are often in arrears
Debt Collection Scoring
This collection scoring also has a feature to facilitate debt management decisions. In general, collection scoring is used for debt collection. A billing assessment can help you increase the efficiency of collection & recovery activities, reduce the number of write-offs, and also reduce staff costs. With this collection scoring, lenders can:
1. Improve collection and recovery
2. Make more efficient decisions, especially for debt management
3. Segment, prioritize, and distribute debtors to your company's collection team
4. Reduce billing costs
5. Using predictions from case history collection as well as recovery information.
6. Creating an effective debt collection strategy
Several things encourage your company to use Collection Scoring. The first reason why your company needs to use collection scoring is to group accounts and prioritize and target debtors who need to be contacted. In general, many debtors recover on their own, or in other words, they pay off the account without contacting the lender. With this collection scoring, you can make the right and appropriate decisions regarding which ones require extra time and human resources in billing. The collection scoring system produces an output called the collection score. This collection scoring model can be used to develop a structured and quantitative approach to outsourcing accounts that have arrears to agencies on a post-charge-off basis. Often these agency assignments are made on an ad-hoc basis with no evidence to support why the agency should accept certain types of delinquent accounts. Collection scoring is also used as a solution to monitor risk-based pricing approaches to drive higher collections and earn lower commissions, thereby leading to increased returns to lenders. This debt collection scoring is primarily for assessing the portfolio you want to acquire. If allowed during the buying or bidding process, collection scoring can be used as a valuable tool to help predict the purchasing ability of a financial product.
How do get maximum results in the use of collection scoring?
1. Understand the difference between collection scoring and other types of risk scoring.
2. Use collection scoring to reduce the roll rate on bad debt losses.
3. Use collection scoring to assess portfolios.
4. Create a risk-based approach to outsourcing collections by scoring collections.
5. Consider validating and determining which collection scoring has better performance on the portfolio (30 days/ 90 days/ 150 days/ 180 days, etc.)
Collection scoring can be a solution for the lender to reduce costs that should be paid, so we can say that collection scoring could help to minimize costs for business. Besides solutions, collection scoring can get insights from the debtor. So lenders can check their debtor's history before giving them the loan. Because sometimes if the lender does not check their debtors carefully, it can increase the risk of lenders not paying back their loans. By using this debt collection scoring model lenders could learn more regarding the probability of debtors that are likely to pay and also help your business focus on the business development. By using the collection scoring model, lenders can quickly check the debtor's profile & contact and are also able to increase the checking. Using a collection scoring also helps to identify and reduce fake accounts, and gives solutions to lenders about strategies to be done. So lenders can give loans to an account that is likely to pay.
Frequently Asked Question
Why companies should use Collection Scoring?
Collection Scoring by AdIns provides a more effective and efficient convenience for Collectors in decision-making to collect collections for clients.
Does Collection scoring can be integrated with any core system?
Collection Scoring by AdIns is integrated with the CONFINS and can be integrated with other core systems.
How long does it take to implement Collection Scoring for your company?
Collection Scoring can implement in your company within 1-2 months.
What should I do if I have problems operating Collection Scoring?
Please submit a complaint through your IT support then to JIRA and we will immediately help with any technical difficulties.