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By Jennifer Reid
The COVID-19 pandemic combined with a prolonged period of
high inflation has significantly altered the credit picture for the
average consumer, as well as the value of consumers’ portfolios
overall. These are two key factors affecting the health and
viability of every lender’s portfolio. For lenders, it is important
to conduct a portfolio review no matter the prevailing economic
climate. Having the right resources, data and insights can make all
the difference in managing a portfolio’s risk and maximizing its
According to the Federal Reserve Bank of
New York, “total household debt rose by $148 billion, or 0.9
percent, to $17.05 trillion in the first quarter of 2023.” While
consumer debt is increasing, portfolio values have seen enormous
amounts of volatility over the past few years.
In April 2023, there was a nearly 80% increase in consumer
debt write-off (non-mortgage) compared to 2022 totaling $8.62 billion.*
Given this volatility, it is imperative that lenders have
insights into the overall impact on their portfolios. Equifax’s The Work Number® Portfolio
Review provides the updated, expanded view lenders need to better
understand their customers’ present financial situation. This view
helps them make more informed and confident account management
decisions. The Portfolio Review solution provides employment and
income details that can help assess consumer behaviors during
fast-changing market conditions.
Employment and income insights may help identify trends in
your portfolio. These may indicate a consumer’s potential to be
delinquent or default on their debt obligations. This data helps
inform credit line management, loan or payment modification plans,
contact prioritization, and credit reissue decisions.
A review of a portfolio allows lenders to have a more
relevant and meaningful view of consumers. With enriched
information specific to their account management needs, lenders
can proactively identify risk and opportunity at key stages of the
account lifecycle. They can confidently make decisions that help
reduce loss by prioritizing treatment activities. In doing so,
lenders can accomplish several critical items that will help their organization:
Determine the proper level of funding for debt
reserves and portfolio credit mix
Quickly determine creditworthiness for credit line
A growing number of lenders are leveraging critical, instant
databases from leading providers such as The Work Number for
income and employment verifications. With over 161 million employment
records from current employers, The Work Number helps lenders
effectively and efficiently review a portfolio of consumer accounts.
It is important for lenders to conduct a portfolio review,
regardless of the state of the economy. This activity can help lenders
mitigate risk in their portfolio and identify potential opportunities
for growth. Equifax
has advanced technologies that can help lenders gain better insight
into and understanding of each consumer. This can help in developing
proactive customer account management strategies.
* U.S. National Consumer
Credit Trends Report: Portfolio, May 24, 2023; Consumer Debt
Observations as of April 2023.