Increase Profitability with Recovery Scoring

by Guest Contributor 2 min read May 7, 2011

Scoring is one of the fundamental ways to improve customer management and acquisitions in any business. Companies use scoring to predict what kind of risk they will be working with before granting credit. When those predictions turn out to be wrong and the accounts move into collections, scoring is crucial in determining which actions result in repayment.

Many companies handle each past due account in the same manner. They make sure they have updated phone numbers and addresses; then send letters and make phone calls–all of which are important steps. However, treating each account the same is neither an effective nor efficient use of resources. When dealing with a large number of collection accounts and a staff that needs to do more with less, you need a segmentation strategy to determine which accounts are most collectible, and focus your efforts on those accounts.

Scoring has been used in collection efforts for many years; however the economy has changed dramatically since recovery scores were developed so it’s time to start considering new recovery scoring technologies. The use of blended data, which combines account-level transactional data and credit data, and advanced analytics, are vital to producing the most predictive recovery results. Leveraging geographic-based summarized data provides another level of segmentation allowing decisions to be made based on such things as local jobless rates or localized wealth pockets where income is higher in certain areas.

Today’s most profitable collections operations utilize segmentation strategies that consider the customer’s capacity to pay and probability of recovery. Corresponding treatment strategies are then aligned so that more money is spent on those customers that are more likely and willing to pay, while spending less money on those that are not likely and less willing to pay.

Regardless of your company size, the interest in minimizing costs within collections operations and maximizing dollars recovered should be your goal.  Innovations in recovery modeling will undoubtedly help you reach that goal.

For additional information on recovery modeling, click here.

Related Posts

What Is a Third-Party Breach? How to Prepare for and Respond to Vendor Incidents

Learn what a third-party breach is and steps to prepare, contain risk, and support affected customers. Read more!

November 9, 2026 by Laura Burrows
Mortgage Underwriting Moves from Modernization Talk to Action 

Mortgage underwriting is entering a new phase. In a recent conversation with HousingWire’s Allison LaForgia, Michele Bodda, Group President of Experian Housing, Verification Solutions, and Employer Services, discussed how modern credit scores, alternative data and verification tools are changing how lenders evaluate borrowers.  Lenders can now judge modernization by its results, Bodda said. “Now we’re actually letting more modern scores get into underwriting to help price loans and go all the way through to securitization,” she told HousingWire. “We’re letting the scores and the data actually speak for itself instead of just talking about it.”  The Right Data at the Right Time  Modernizing underwriting means providing useful information at the right stage, rather than giving lenders everything at once. “You don’t need everything all at once. You don’t need everything on initial pull,” Bodda said.  Alternative data, such as rental payments and buy now, pay later activity, can help show how consumers manage obligations, especially those with thinner credit files. A thin credit file does not necessarily mean someone has a thin financial life.  “It’s our responsibility as one of the primary data providers to make sure we can make all of that available, so that we’re best representing the consumer,” Bodda said. A fuller view of data may help lenders identify creditworthy applicants who might otherwise be difficult to assess.  Simplifying Verification and Reducing Friction  Bodda also shared how Experian is making credit information more easily accessible and reducing unnecessary costs during the originations process, explaining that new enhancements to Experian’s Power Profile Plus allow lenders to pull credit data at the start of underwriting and request another score later without repurchasing the data.  “You can pull it later and not pay for the credit data again,” Bodda said.   Experian is also investing in income and employment verification, including through a new partnership with Workday. Bodda explained that Experian will continue to focus on process improvement, competition and innovation across the mortgage ecosystem.  A Broader Path to Homeownership  As consumer expectations and underwriting capabilities evolve, borrowers want a process that reflects their financial lives, while lenders seek greater efficiency. Modern scores, relevant data, and streamlined verification can help lenders assess applications with more context—and may help more people pursue homeownership.  “If we as an industry can open this up and bring more people into the process, then we’re going to thrive,” Bodda said in the interview.   Watch the interview and hear all of Michele’s insights, and more here.  

November 6, 2026 by Caroline Basile
How to Deliver Data-Driven Customer Experiences

A data-driven credit customer experience offers personalization and low friction — it's a win-win for consumers and businesses.

November 5, 2026 by Zohreen Ismail

Subscribe to our Newsletter

Enter your name and email for the latest updates.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Subscribe to our Newsletter

Don't miss out on the latest industry trends and insights!
Subscribe