Have you ever thought of offering free credit monitoring services to consumers from whom you are trying to collect? Normally something that someone only does after they are informed that their personal information may have been involved in a data breach, credit monitoring is becoming more popular among consumers in the United States, and those who monitor their credit pay down more debts than those who do not, according to data released this week by TransUnion.
On average, individuals monitoring their credit decrease their amount of debt by 11%, according to the report. One-third of consumers who are monitoring their credit are doing so with the intention of keeping an eye on their account balances, and 24% of consumers monitoring their credit said they were able to reduce their debt balances.
The report breaks consumers monitoring their credit into three segments — credit improvers, credit seekers, and credit managers. Companies in the ARM industry that furnish information to the credit bureaus would do well to learn about these three segments because it might help tailor conversations and talk-offs with consumers. Knowing why someone is paying attention to his or her credit score can provide much-needed information to convince that person to pay down his or her debt.
Credit managers tend to have higher debt balances than consumers with similar profiles or no credit monitoring history, according to the report.
By keeping an eye on their credit, consumers are more apt to make payments on time, which is a key reason by the average credit score improvement after one year of credit monitoring is 28 points, five points higher than those who do not monitor their credit.
Back to my original question — 33% of consumers say they would prefer a lender that offers credit monitoring services when choosing where to originate a new loan, and 39% said a lender offering credit monitoring services would influence them to continue banking with that lender.
