Account Delinquency

Overview

info

Your delinquency credit policy is set up by the Highnote team when configuring your card product.

A financial account's delinquency state differs from its status.

Delinquency State represents the account's receivables and can be CURRENT, DELINQUENT, CLOSING, CLOSED.
Status represents the financial account itself and can be ACTIVE, SUSPENDED, UNDER_REVIEW, PENDING_CLOSURE, CLOSED.

Receivables are purchases that must be paid back and are represented by the account holder's outstanding account balance.

When an account holder borrows against a line of credit, receivables are created against their account. When the account holder does not make the minimum payment on their billing statement by the due date, the receivables can become delinquent.

Delinquency fields

An account holder’s financial account displays the following fields for delinquencies:

Field	Description
`delinquencyStartedOn`	Due date of the oldest, delinquent billing statement on the financial account
`totalDaysDelinquent`	Number of days since the oldest, delinquent billing statement’s due date, as of today
`totalAmount`	Total delinquent amount on the financial account, as of today
`totalNumberOfCycles`	Number of billing cycles the financial account has been delinquent, as of today

Financial accounts also display billing cycles. A billing cycle displays the following information for delinquencies:

Field	Description
`daysDelinquent`	Number of days delinquent for the billing cycle, as of today
`amount`	Past due amount for the cycle’s billing statement, as of today
`state`	State of the billing cycle at the `periodEnd`

Financial account attributes

Financial account attributes indicate the reason the account meets or exceeds your credit policy so that you can take action.

When a financial account’s totalDaysDelinquent meets or exceeds your card product’s delinquency policy, an attribute is added. You can manage credit risk by notifying customers of delinquencies, performing collections, or suspending financial account authorizations.

To automate cardholder communications and send push alerts or notifications to account holders, use the financial account attributes notification events.

The following table includes supported financial account attributes with Test environment default settings. Settings in the Live environment may vary depending on your card product's delinquency policy:

Attribute	Description	Test Env Default Value
`DELINQUENT`	The financial account is considered delinquent based on your card product’s policy; no restrictions have been placed on the financial account.	`totalDaysDelinquent` >= 30 days
`DELINQUENT_SUSPENDED`	The financial account is excessively delinquent based on your card product’s policy and the financial account’s status is `SUSPENDED`; authorizations are blocked on all associated payment cards.	`totalDaysDelinquent` >= 90 days
`CHARGE_OFF`	The financial account has failed to make the minimum payment for X days, based on your card product's policy, and will be closed. The financial account attribute of `CHARGE_OFF` is added and the financial account status is set to `SUSPENDED`	`totalDaysDelinquent` >= 180 days

When a payment is made and a financial account’s totalDaysDelinquent no longer exceeds your delinquency policy, Highnote removes the financial account attributes and updates the account to current.

Delinquency flow

The following diagram is a high-level view demonstrating how a cardholder can get into and out of delinquency with a card that has been configured with Highnote delinquency attributes. The diagram shows the relationship of a financial account's delinquency state and status. The exact day when an account's receivables become delinquent varies depends on your configured policy.

Delinquency Flow

Clearing delinquency

The following scenarios show two ways to clear a delinquency and restore a suspended card to an active status.

Example: $10 initial fee

Scenario: A minimum payment of $10 is past due for an initial card fee. The financial account delinquency state = DELINQUENT and status = SUSPENDED.

Workflow:

The $10 initial fee is waived.
The minimum payment is considered fully paid.
Account delinquency state moves to CURRENT (and clears from Dashboard view).
Account status moves to ACTIVE.

Example: $10 initial fee + $100 transaction

Scenario: A minimum payment of $25 is past due ($10 initial fee plus minimum payment of $15 for a $100 transaction). The financial account delinquency state = DELINQUENT and status = SUSPENDED.

Workflow:

The $10 initial fee is waived.
The minimum payment is considered partially paid.
A minimum payment of $15 remains past due.
Account delinquency state stays DELINQUENT and account status stays SUSPENDED.
The cardholder pays off the remaining $15.
Account delinquency state moves to CURRENT (and clears from Dashboard view).
Account status moves to ACTIVE.

Find delinquency status

You can view the totalDaysDelinquent and totalAmount on an individual financial account. You can also view the daysDelinquent and amount delinquent for an individual billing statement.

If the financial account is current or newly created and does not have a closed billing cycle, Highnote returns no delinquency data.

Use the following query to find a financial account's delinquency status:

LookupFinancialAccountDelinquencyStatus

Query

query LookupFinancialAccountDelinquencyStatus($id: ID!) {
  node(id: $id) {
    ... on FinancialAccount {
      id
      accountStatus
      accountAttributes
      delinquency {
        __typename
        totalAmount {
          value
          currencyCode
        }
        numberOfCycles
        totalDaysDelinquent
        delinquencyStartedOn
        currentDelinquentCycles {
          daysDelinquent
          statement {
            periodStart
            periodEnd
            openedAt
            closedAt
            primaryLedger {
              debitBalance {
                value
              }
              creditBalance {
                value
              }
              normalBalance
            }
          }
          amount {
            value
            currencyCode
          }
          state
        }
      }
    }
  }
}

Variables

{
  "input": {
    "id": "FINANCIAL_ACCOUNT_ID"
  }
}

⚠️ Please login to execute queries. Visit the dashboard to authenticate.

Result

{
  "id": "FINANCIAL_ACCOUNT_ID",
  "accountStatus": "ACTIVE",
  "accountAttributes": [
    "DELINQUENT"
  ],
  "delinquency": {
    "delinquencyStartedOn": "2022-11-07T05:00:00.000Z",
    "totalDaysDelinquent": 57,
    "totalAmount": {
      "value": "300",
      "currencyCode": "USD"
    },
    "numberOfCycles": 2,
    "currentDelinquentCycles": [
      {
        "daysDelinquent": 57,
        "statement": {
          "periodStart": "2022-10-03T05:00:00.000Z",
          "periodEnd": "2022-11-03T05:00:00.000Z",
          "openedAt": "2023-01-03T23:17:14.983Z",
          "closedAt": "2023-01-03T23:23:17.546Z",
          "primaryLedger": {
            "debitBalance": {
              "value": 0
            },
            "creditBalance": {
              "value": 300
            },
            "normalBalance": "CREDIT"
          }
        },
        "amount": {
          "value": 300,
          "currencyCode": "USD"
        },
        "state": "DELINQUENT"
      },
      {
        "daysDelinquent": 27,
        "statement": {
          "periodStart": "2022-11-03T05:00:00.000Z",
          "periodEnd": "2022-12-03T05:00:00.000Z",
          "openedAt": "2023-01-03T23:23:17.546Z",
          "closedAt": "2023-01-03T23:25:35.519Z",
          "primaryLedger": {
            "debitBalance": {
              "value": 0
            },
            "creditBalance": {
              "value": 300
            },
            "normalBalance": "CREDIT"
          }
        },
        "amount": {
          "value": 0,
          "currencyCode": "USD"
        },
        "state": "DELINQUENT"
      }
    ]
  }
}

Charge off account

info

We recommend that you notify the account holder if their account is being closed due to charge off.

When a financial account's receivable balance is uncollectible based on your card product's credit policy, the balance is charged off as a write-off expense.

A credit card balance is typically charged off when the account holder has not met the billing statement's minimum payment for 120 to 180 days. In the Live environment, this length of time will be determined by your card product's credit policy.

When a charge-off occurs, the following events take place:

The financial account receives a CHARGE_OFF attribute and the FinancialAccountStatus is updated to SUSPENDED, UNDER_REVIEW, or PENDING_CLOSURE. If the account receivables are delinquent for more than the configured charge_off_days, the Delinquency State is updated to CLOSING.
The Highnote team charges off the balance and closes the financial account based on your credit policy: FinancialAccountStatus = CLOSED.
Any unpaid balance, including the principal balance, fees, or interest charges are written off as an expense.
The Highnote team provides your team with monthly reporting.

To receive charge off notifications, subscribe to financial account attribute charge off events.

Simulate delinquency

To simulate delinquency in the Test environment, see Simulate Delinquency.

Overview​

Delinquency fields​

Financial account attributes​

Delinquency flow​

Clearing delinquency​

Example: $10 initial fee​

Example: $10 initial fee + $100 transaction​

Find delinquency status​

LookupFinancialAccountDelinquencyStatus​

Charge off account​

Simulate delinquency​