Negative Credit and Recovery: How to create the ideal collection strategy?

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Have you ever thought about the importance of a good strategy to reduce default and how to do it properly for your business?

After a challenging year, socially and economically, entrepreneurs and consumers are more aware of their finances. Proof of this is the significant drop in the default rate in 2020.

But make no mistake: every company will need to collect rcs database from customers at some point. In these cases, seeking methods to achieve financial security and reduce defaults are essential. Therefore, we have listed some of the main actions for negative credit and credit recovery and how they can be applied.


National scenario in 2020

Last year, the default rate fell by 17.3% compared to 2019. The data is from Boa Vista SCPC. This scenario was due, in part, to the implementation of emergency aid, a source of stable income for many families. Some banks, for example, offered deferrals of loan and financing installment payments. In addition, with the uncertainties brought about by the pandemic, many consumers chose not to take on long-term debt.

According to Boa Vista, 2021 will continue to require caution from traders. With the resumption of the emergency aid program still on hold, in addition to the increase in informal work, the current level of default may undergo major changes. Therefore, it is extremely important that each entrepreneur knows the best credit recovery strategies for their business.

Read also: “ Business Planning 2021 – Tips to Strengthen Your Business ”

Collection Rule – the first step in the negative credit and recovery strategy

“Collection Rule” is the term used for a sequence of actions defined by a company to recover a debt. It has two objectives: to contact the defaulting customer and to seek payment of the amount owed.

This communication aims, initially, to understand the reason for the late payment. The consumer may simply have forgotten the due date of the invoice or is facing personal or financial difficulties. However, in most cases, the consumer will be interested in regularizing the situation and keeping their name in good standing with credit bureaus.

With the collection rule, you can define deadlines and actions in the collection process. For example, you can send a notice to the customer about 2 days before the due date. In the following days, after the stipulated date, we recommend contacting them by email or phone. At this point, the idea is to remind them of their financial commitment.

After 15 days, we recommend sending the consumer a Notice Letter , delivered by the Post Office to the address provided at the time of purchase. It is often accompanied by a new invoice to facilitate the process. If payment is not made within 10 days, the company may blacklist the customer , registering their CPF with the SCPC.

However, if the debtor still does not pay the outstanding balance, you can send an extrajudicial collection notice . Known as a NEJ Letter , the document informs the defaulting customer of the creditor's interest in starting a negotiation process without judicial interference. Currently, there are three most common models of extrajudicial notification: light, moderate and heavy . Each one has a more or less incisive tone and is indicated for different cases.