How Subscription Businesses Can Benefit from Regular Account Review Inquiries
In today’s economy, many businesses are moving to a subscription model. This means that customers pay a recurring fee for access to a product or service. This model can be very successful, but it also comes with some risks. One of the biggest risks is that customers may default on their payments.
There are a number of things that businesses can do to mitigate the risk of customer defaults. One of the most effective is to pull credit reports on customers on a monthly basis. This type of inquiry is commonly referred to as an “account review”, and allows businesses to track changes in customer creditworthiness and identify potential problems early on.
There are a number of benefits to pulling credit reports on customers monthly. First, it allows businesses to identify customers who are at risk of defaulting on their payments. This gives businesses the opportunity to intervene early and take steps to prevent a default. For example, a business could offer a customer a payment plan or a discount on their subscription.
Second, a monthly account review inquiry can help businesses to identify customers who are likely to churn. Churn is when a customer cancels their subscription. By identifying customers who are at risk of churning, businesses can take steps to retain them. For example, a business could offer a customer a loyalty program or a free trial of a new product or service.
Third, pulling credit reports on customers monthly can help businesses to improve their risk management. By tracking changes in customer creditworthiness, businesses can better understand the risk of default and make informed decisions about how to manage their credit portfolio.
Finally, pulling credit reports under the account review permissible purpose on a monthly cadence can help businesses to comply with regulations. Many industries, such as the financial industry, are subject to regulations that require businesses to conduct credit checks on their customers. By pulling credit reports on customers monthly, businesses can ensure that they are in compliance with these regulations.
How to Analyze Credit Utilization and Vantage Score Trends
Once a business has pulled credit reports on its customers, it is important to analyze the data. This includes looking at credit utilization and Vantage score trends.
Credit utilization is the amount of credit that a customer is using. It is calculated by dividing the customer’s outstanding debt by their total available credit. A high credit utilization can be a sign of financial difficulty.
Vantage score is a credit score that is calculated by three major credit bureaus: Equifax, Experian, and TransUnion. Vantage scores range from 300 to 850. A high Vantage score indicates that a customer is a good credit risk.
By analyzing credit utilization and Vantage score trends, businesses can identify customers who are at risk of defaulting on their payments or churning. This allows businesses to take steps to prevent these problems from happening.
Pulling credit reports on customers monthly can be a valuable tool for businesses with a subscription model. By tracking changes in customer creditworthiness, businesses can identify potential problems early on and take steps to prevent them from happening. This can help businesses to improve their risk management, comply with regulations, and retain customers.