State transition

A change from one state to another. It shows how an object, account, or process moves through defined stages or conditions.

Example

In portfolio management, state transitions often describe how accounts move between delinquency buckets based on DPD. For example, an account can move from current to 1–30 DPD, then to 31–60 DPD, or return to current after payment. These transitions are often tracked as roll rates, which helps teams monitor portfolio performance, spot changes in risk, and make better decisions about collections, provisioning, and strategy.