As we live through a unique time in our history, some people have tossed around the idea of having a “new normal” after COVID-19.
So what does the ‘new normal’ mean for the collection industry? Credit disputes and delinquencies are expected to spike due to the economic impacts of COVID-19. Some analysts have been seeing troubling signs among fresh delinquencies. New delinquencies are watched closely as an early indicator of declining credit quality that might lead to defaults and charge-offs. Such upticks could be the result of lack of ability to pay due to financial stress within the household during these trying times. Consumers may be starting to feel the pressure of carrying debt. Alternatively, it may simply be the result of “sloppy” bill-paying routines of consumers.
Delinquencies are projected to increase across the spectrum, particularly including mortgages, credit cards, personal loans, and auto loans.
While the economy has slowed, some core measures like inflation and unemployment remain very healthy and continue to bolster the market. However, continued economic headwinds, combined with soft wage growth, heightened global economic uncertainty and interest rate increases, may continue to cause some challenges. Against this backdrop, it is important that lenders have a deep understanding of consumer risk and potential repayment behavior.
To meet this challenge, managing credit disputes is taking a truly new turn requiring improvements in technology and service techniques. CINCB continues to improve its platform to provide exceptional 24/7 team service through our member portal. We efficiently manage disputes, optimize collection processes and help you boost collections. Now, through our portal, you can also monitor and oversee your accounts placed with us 24/7/365.
Let’s face it. COVID-19 has changed the economic outlook, and long-term impacts will have to be monitored. The nature of this unique crisis means that we are currently facing an extremely high level of uncertainty for some time. The longer the shock, the more severe is its impact will be on growth and potential rise in delinquencies. Your business, however, can stay ahead of the curve by working with CINCB to improve your collections, monitor progress, and mitigate financial risks.
Contact CINCB today with your questions. As a reminder, you can find sample documents, a credit policy handbook, and more on our website. Just click here to download. To get started right away and access all the tools you need, click here to become a member.
CINCB has been established since 2002 to provide debt collection and credit reporting services. CINCB serves over 260 creditors locally and internationally with a local team of highly experienced agents ready to serve you. Services are delivered fully online at www.CINCB.ky. Contact us today to find out more.