[Video] Unlocking a Consumer’s True Capacity to Pay

Did you know that a consumer’s credit score isn’t the most indicative measure of their capacity to pay? Credit scores lag, they don’t provide a full picture, and they can’t be monitored daily. By focusing on capacity to pay instead of a credit score, many in the collections industry are seeing an uptick in their paying accounts. But what is capacity to pay, and why does it matter?

Consumers often show an improved capacity to pay before their traditional credit scores fully recover. Capacity to pay considers certain events in a consumer's financial life and how those events can impact repayment. By studying consumer behavior and the correlation between certain events and repayment of accounts, triggers have been identified that indicate timely contact with a consumer which can convert a warehoused or stale account into a performing account. 

Listen to our Executive Q&A with Experian’s Matt Baltzer, or read below to learn about capacity to pay, why it matters, and how your organization can unlock its potential.