Disqualification is an important signaling mechanism in the credit market because it reduces credit risk and the risk of over-indebtedness. In some cases, a negative credit rating may only be the result of a one-off problem, for example due to an unforeseen event. In most cases, however, a negative credit rating indicates a deeper problem of financial imbalance. This is what the figures for repeat defaults suggest.

According to data from the credit bureau sector, 83% of the consumers who were denied credit in May 2025 were repeat offenders. According to this indicator's methodology, repeat offenders are those consumers who have been negatively rated at some point in the previous 12 months. The breakdown of the data also reveals that 63% were already negative and had a new negative rating, while 20% recovered their credit in the previous 12 months and returned to the negative list.

When default is the result of a more serious financial imbalance, full credit recovery only occurs when the consumer renegotiates their debts and gets their budget back in balance. This first requires a clear diagnosis of the factors that led to the imbalance. These factors can include behavioral biases that lead to impulsive spending and the misuse of credit methods such as cards and overdrafts. Once the diagnosis has been made, priorities need to be established in order to adjust the budget and make it possible to meet obligations, including the renegotiation installments.

Recidivism data is important for formulating policies and actions that seek to promote credit recovery, suggesting that these measures can be more effective when associated with financial education training, empowering consumers to have a healthier relationship with money.

In recent years, we have experienced a long cycle of credit growth, especially in the individual segment. This cycle is still ongoing and reflects the virtuous process of financial inclusion. According to Central Bank data, the credit-to-GDP ratio went from 48.5% in May 2020 to 54.6% in May 2025. The most recent projections in the Monetary Policy Report indicate that credit to families will continue to grow in 2025, with an estimated advance of 9.3%. In recent months, however, the evolution of indebtedness and delinquency has attracted attention.

The credit bureau sector estimates that around 47.3% of the adult population is in default. In May 2024, this percentage was estimated at 44.9%, which shows a significant increase in default over the last few months. Data from the Central Bank shows that household indebtedness has risen again, reaching 48.9%.

This is where credit recovery comes into play. In addition to credit information, the credit bureau sector is active in credit recovery, promoting the meeting of creditors and debtors, either through the well-known “name-cleaning sessions” or through debt renegotiation platforms. The online consultation of the credit score, which has been available since before the pandemic, also facilitates the diagnostic assessment of the financial situation and the search for renegotiation of arrears.

Just like credit analysis tools, debt recovery solutions have also absorbed regulatory changes, such as the Over-indebtedness Law, and technological transformations. The application of data intelligence makes it possible, for example, to identify where the credit recovery approach can be more successful, making arrears management more efficient, as well as directing efforts towards default prevention.

Credit recovery has an impact on the cost of credit itself. The more efficient this process is, the lower the cost of loans and financing tends to be. Technological advances can have an impact on the recovery rate. However, full recovery depends on the degree of awareness about the use of credit. In short, the advancement of credit on a sustainable basis requires, in addition to technological and regulatory transformations, financial literacy work, so that consumers establish a healthy relationship with money, making conscious use of financial instruments, which are increasingly accessible, generating social welfare.