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How a Relationship with Credit Counseling Agencies Can Benefit Lenders

As a lender, you have a fine balancing act to walk. You want to lend to as many responsible consumers as you can while keeping your risk low and making sure that the money eventually comes back to you. This is not always an easy job, especially in a world where people sometimes have a challenge in managing their own debt. One resource that many banks and lenders do not leverage enough is a credit counseling agency (CCA). A good relationship with reputable CCAs can benefit lenders in a variety of ways.

Improve Your Risk Management Strategy


Risk mitigation is important for every lending institution. If cardmembers do not make payments on time, you can face increased costs and losses. While your institution may have strategies in place to help reactively reduce losses, it may not (and often cannot) be enough for all borrowers.


You want to have someone who is 100% focused on helping you prevent charge-offs and losses. When you start to notice that a cardmember has been late on a payment or two, referring them to CCA can be a great move for both parties.


The CCA doesn’t want to see the consumer’s credit score go down or send them down the road to bankruptcy. Unlike lending organizations, CCAs have the ability to view all of the cardmember’s debts, which allows them to help cardmembers create a full budget or debt management plan. A holistic approach to debt can ultimately get many cardmembers back on track to paying on time.


Align Your Brand Strategy and Improve Consumer Experience


When you take the time to create a relationship with a credit counseling agency, you can work with them to tailor the messaging they’re giving to your cardmembers. This ensures a smooth experience for your cardmembers from beginning to end, making for better brand management.


With the help of the CCA, the cardmember you referred may avoid becoming a loss risk. At that point, you want them to be able to continue working with you and refer to others. The best way to do this is to build a seamless, enjoyable brand experience.


How to Build a Relationship with Credit Counseling Agencies


In order to build a solid relationship with a credit counseling agency, you need to check reviews from both cardmembers and other lending institutions. Their industry reputation is incredibly important. You want to know that the agency is going to have your requirements and your cardmembers’ best interests in mind. That ensures your customer is treated fairly and gets the right help they need.


Building a relationship and trust with CCAs takes time and experience. You need to work with them to understand how they operate and make sure that they’re a good fit for your lending institution.


CCA Management Services with Peregrin


When it comes to CCAs, you need to know they can help your customers as you would, they are available when your cardmembers needs help, and they are scalable with the tools your cardmembers are accustomed to using. You want to be sure that they’re going to treat your cardmembers well while saving you time and money.


At Peregrin, we work with a number of CCAs who have earned the trust of major lenders. The best CCAs work diligently for both cardmembers and lending institutions. If you have more questions about how a good working relationship with a credit counseling agency can benefit lenders and how to build that relationship, give us a call at 800-231-2493 or contact us on the website.

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