What is meant by “skip tracing” in collections?

Skip tracing refers to a specific practice within the field of collections that involves locating a debtor whose current whereabouts are unknown. This process is essential because debtors may change addresses, phone numbers, or other contact information, making it challenging for creditors or collection agencies to reach them for repayment.

In skip tracing, collectors utilize various tools and resources, such as public records, credit reports, and online databases, to track down individuals who have become difficult to contact. This is crucial for efficiently handling collections and maximizing the chances of recovering unpaid debts. The accuracy and effectiveness of skip tracing can significantly impact the success rate of collection efforts, highlighting its importance in the collections process.

The other options do not accurately describe skip tracing; for example, notifying debtors of their debts does not involve locating them, and recording payment histories pertains to tracking payments rather than finding debtors. Additionally, strategies aimed at increasing collection amounts do not specifically relate to the act of locating a debtor.