Roll Rate
Roll rate measures the percentage of MCA accounts migrating from one delinquency bucket to the next month-over-month — the most sensitive leading indicator of future charge-off trends in MCA portfolio analytics.
Why This Matters
Roll rate calculation: accounts in bucket N at month-end / accounts in bucket N-1 at prior month-end. Monitored roll rates: current-to-30, 30-to-60, 60-to-90, 90-to-charge-off. Typical healthy MCA roll rates: 5-10% current-to-30, 30-50% 30-to-60, 50-70% 60-to-90, 70-90% 90-to-charge-off. Rising roll rates in early buckets predict charge-off increases 60-90 days forward, providing actionable lead time for collections strategy adjustment, pricing changes, or underwriting tightening.
Frequently Asked Questions
Frequently Asked Questions
Why is roll rate more useful than current delinquency rates?
Roll rates measure migration velocity rather than static balances. Static delinquency rates can stay stable while roll rates accelerate (signaling future deterioration) or decelerate (signaling future improvement). Roll rates predict; static rates describe.
What roll rate change is concerning?
20%+ increase in current-to-30 roll rate (e.g., from 7% to 9%) typically signals meaningful credit deterioration and warrants underwriting review. Sustained increases across multiple months confirm trend.