Data and Analytics

Trended Data – Minimize Risk and Head Off Default

Trended Data – Minimize Risk and Head Off Default

July 31, 2019 | Theresa Freas

This is the final article in a 5-part series. We originally published this post on December 20, 2016 and updated it on July 17, 2019.

Today’s static consumer credit profile provides a limited understanding of financial behaviors and risk profiles. Alternatively, trended data helps you see the trajectory of spending and repayment behaviors by analyzing consumers’ financial behaviors over a set period of time. Compared to the static snapshot view you get from a traditional credit profile, trended data can help you refine and monitor your underwriting and modeling strategies. Trended data can also help you identify prospects that fit your ideal risk profile.

How to Proactively Monitor Your Portfolio

Incorporating trended data into risk decisioning can help you more actively monitor your portfolio. It can help you:

  • Readily identify customers who may be likely to default, so you can proactively work with those customers to ensure timely repayment of credit
  • Understand the ‘breaking point’ where a customer will likely default
  • Prioritize debt collection activity by determining likelihood to repay accounts already in default
  • Determine future bankruptcy potential, helping you avoid further loss through early detection

Monitoring consumer credit over time can also alert you to abnormal spending patterns, an indicator of potential fraud. Is your customer opening several accounts in a short period of time? Could you be looking at potential bust-out fraud? Trended data can help you proactively detect such patterns in account opening, helping you head-off fraudulent activity.

Finally, incorporating trended data into your daily activities may help streamline and automate the labor-intensive manual review processes. Learn how Equifax can help you minimize risk and head off default, and check out the other articles in this 5-part series: