With the shift in housing benefit payments being made to individuals, coupled with recent welfare reforms and the rising cost of living, the risk of missing a rent payment has never been greater.
Data analytics can help harness the power of your data to help you predict and safeguard individuals who may be experiencing financial difficulty. It can also help support at-risk tenants and prioritise recoveries, while ensuring every individual is treated in a fair and consistent manner. This level of insight enables your business to make better informed decisions.
The power of analytics
For tenants who are currently up to date with their payments, credit score analysis1 can be used to help predict those who may start missing payments, or who are at risk of becoming overdue up to 12 months ahead.
Low scores indicate a deteriorated credit profile by highlighting payment defaults, County Court Judgments or high levels of credit use. For instance, our Experian analysis of client data shows that out of the lowest scoring 10% of tenants, 35% are likely to fall behind with rental payments within the next 12 months.
Direct payment is an additional concern. Our analysis of client data shows that the most at-risk group of tenants, while currently small, is likely to pose cash flow challenges with significantly higher overdue balances. Generally this group’s credit scores will be lower, with nearly 30% of direct payees falling within the lowest band, normally populated by around 1 in 10 tenants.
How to help?
Tenants that are currently in arrears can be helped by being offered fair and appropriate remedies to ensure their financial positions are safeguarded.
By using insight that consists of internal housing association data, along with tenants’ historic behaviour and financial performance, you can create an acutely powerful array of predicative payment tools. These tools can indicate which tenants are most likely to recover within any given three-month timeframe and also ensure appropriate activities can be prioritised to best meet each individual’s specific circumstance.
The chart below highlights the critical benefit in combining key performance metrics. It enables housing associations to take a variety of pre-emptive actions including offering at-risk tenants timely support to help them avoid financial difficulties. At the same time, providers can also ensure their social mission can continue by taking steps to safeguard their cash flow.
Experian works in partnership with numerous housing associations across the UK to help them help tenants who may be facing financial stress, safeguard their position and improve their prospects. To find out more about how you can use data to underpin well-informed and intelligent decision-making please contact us at email@example.com or 0844 481 5873.
To find out more on helping you better understand your tenants, download our whitepaper and please click here.
1 – for those organisations that have access to CAIS data, credit scores can include this information