Ask The Experts: Using the Correct Data in Skip Tracing

Ask the Experts is an interactive section where readers can ask direct questions to the experts at Kaulkin Ginsberg, the leading strategic advisors to the ARM industry — and a sister company of insideARM.com — as well as other seasoned industry executives.

Question: Which data is more reliable for finding hard-to-contact debtors: public record data or credit bureau data?

Answer: (from Rob Fite, VP of Receivables Management Solutions – LexisNexis® Risk Solutions)

The simple answer is that organizations should rely on all types of data when trying to find debtors. It is important that skip tracers have access to information from different sources.

At LexisNexis® Risk Solutions, we have shown through research that up to 35 percent of delinquent debtors move each year. So tracking them can be a challenge.

There are two basic broad sources for most skip tracing data: public record data (like property records, motor vehicle registrations, and court records) and credit bureau header data, which is comprised of information that consumers give to organizations when they apply for credit. Both are very important in searching for debtors.

But the dynamics of current economy have impacted the usefulness of some types of data.

A few years ago, at the height of the housing boom, credit bureau data was typically very reliable. There was an unprecedented surge in mortgage applications that led to easy locates using bureau data. Beyond mortgages, credit expansion was progressing at a record pace, especially in the credit card sector. In short, everyone was borrowing. Since the credit economy was capturing more people than ever, bureau data became hard to outrun for those inclined to do so.

After the financial crisis in fall 2008, lenders began tightening credit standards and extending less credit. As unemployment began its determined march upward, consumers were voluntarily pulling back from credit spending as well. The two factors have combined to dramatically reduce credit applications in the U.S. over the past year. This means that credit bureau header data has not been refreshed at the blistering rate it saw just a few years ago.

This is not to say that credit bureau data can be classified as unreliable. Credit is still a very important part of the American economy. And credit bureau header data will be extremely important during the economic recovery. But collection organizations should focus on solutions using data from multiple sources when skipping.

LexisNexis Receivables Management Solutions like Accurint® for Collections and LexisNexis® Link ID™ combine data from multiple sources in one solution. Even as credit bureau header data becomes slightly less reliable due to economic influences, access to countless other data sources keeps results from LexisNexis® skip solutions accurate and efficient.

Rob Fite is the Vice President of Receivables Management Solutions for the LexisNexis® Risk Solutions, and brings with him nearly 20 years of experience in the fields of collections, credit, and risk management. At LexisNexis Risk Solutions, Rob is responsible for leading LexisNexis collections market strategies, product development, business direction and revenue growth. LexisNexis and the Knowledge Burst logo are registered trademarks of Reed Elsevier Properties Inc., used under license.  Accurint is a registered trademark of Seisint, Inc.  Link ID is a trademark of LexisNexis Risk & Information Analytics Group Inc.  Other products and services may be trademarks or registered trademarks of their respective companies.