The credit bureau services market is expected to grow at a CAGR of 12.6% from 2024 to 2030. The market for credit bureaus is expected to grow in the next few years due to the rising demand for credit cards. Credit card benefits, such as unlimited reward points with usage, insurance protection, discounts, and cashback, help increase credit scores. Further, credit card issuers provide credit bureaus with details about cardholder activity that help them confirm each customer's credit ratings, which serve as the foundation for loan applications.
As per the U.S. Federal Reserve Bank report, 82% of adults had a credit card in 2023, and 36% of adults applied for some type of credit in 2023. The adults with a minimum income of USD 100,000 held a credit card in the U.S. in 2023. The rate of credit card applications remained robust throughout 2023 in the U.S.; it reached 29% in October 2023. Due to these factors, the usage of credit cards has increased, which in turn has led to an expansion in the market for credit bureaus.
A credit bureau acquires and maintains track of a variety of credit-related insights on users and organizations, such as loans taken, overdraft facilities, and credit card usage. Increasingly, credit bureaus are partnering or collaborating with fintech companies to provide custom data analytics due to increasing demand for credit from new-to-credit (NTC) consumers. For instance, in 2023, credit bureaus witnessed more pronounced changes in the consumer credit market. As per the TransUnion report, the demand for auto and home equity loans has been steadily increasing since 2023. However, with increasing preference for credit products, the delinquency levels for personal loans and credit cards also rose in 2023.
According to TransUnion’s 2023 Consumer Pulse study, 26% of Americans planned to seek a credit instrument in 2024. Of those, 53% wanted a credit card, 23% wanted a car lease or loan and 22% wanted a personal loan. Credit limits increased by 26% in 2023, as per Equifax estimates. The share of NTC customers dropped from 17% in September 2022 to 14% in September 2023. Despite this drop, consumption-led demand continues to drive the demand for credit globally. In India, between July to September 2023, in the MSME sector, NTC customers accounted for 46% of the credit demand. They are expected to drive growth notably.
The North American region accounts for the largest category share due to an increase in the number of people looking for credit products like loans and credit cards amidst rising consumer awareness of the importance of maintaining a good credit score and routinely checking credit reports. In most places, there are primarily three major credit bureaus in the world - Equifax, Experian, and TransUnion. However, a few medium-sized private credit bureaus are also present in a few countries apart from these three giant players.
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Companies are concentrating their efforts on introducing cutting-edge technologies to strengthen their position in the industry. Blockchain technology enables instantaneous and transparent transaction initiation and execution amongst many parties. For instance:
• In May 2024, Equifax collaborated with the commerce platform, VTEX, to help prevent fraud for merchants worldwide. VTEX’s platform will utilize Equifax’s robust fraud prevention and detection capabilities and “Kount Payment Fraud” solution in this partnership. This will help both B2C and B2B merchants secure their business while providing enhanced customer solutions.
• In March 2024, TransUnion introduced its new platform called “OneTru” for managing, analyzing and providing data-related insights about customers. The platform unifies separate data and analytical resources designed for fraud prevention, credit risk, and marketing and then consolidates them into a single unified integrated layer. This strategy enables TransUnion to provide a more accurate, comprehensive and compliant picture of customers, regardless of the use case.
Credit bureaus possess high bargaining power primarily due to their unique position as information aggregators and providers in the financial landscape. They collect and maintain detailed credit histories of individuals and businesses, which are crucial for lenders and other financial institutions to assess creditworthiness. This information asymmetry gives credit bureaus significant leverage when negotiating with clients, including banks, credit card companies, and other financial entities. Additionally, regulatory barriers and limited competition in the industry contribute to their strong bargaining position. As a result, credit bureaus can influence market dynamics and often dictate terms that favor their interests.
The credit bureau services industry is highly consolidated in nature. Globally, more than 50% - 60% of the market is dominated by three players - Experian, Equifax, and TransUnion. The concentrated industry structure of credit bureau services can be attributed to several factors. First, the nature of the industry requires a high level of trust, accuracy, and regulatory compliance. This leads to a preference for established players with proven track records. Additionally, the entry barriers are relatively high due to the complexity of the services, the need for extensive data management systems, and the regulatory environment. As a result, a few dominant players tend to dominate the market, creating a concentrated industry structure.
The major cost components are salaries of professionals, IT and infrastructure, operational and administrative expenses, legal and marketing. Credit bureaus and IT technology play a vital role in maintaining accurate and efficient credit reporting systems. The importance of investing in IT technology lies in its ability to streamline processes, reduce errors, and enhance security measures. This, in turn, ensures that consumers receive fair credit assessments and financial institutions can make informed decisions. While the cost of implementing and updating IT systems may be significant, the benefits of improved data management, faster access to information, and better risk management far outweigh the expenses.
The category is based on a subscription pricing model, where a full report can be generated with credit scores depending upon the subscription period. The subscription plan could be for one year, 6 months, monthly, or one time as per company requirement. For instance, TransUnion CIBIL, an India-based credit information company, charges Rs 550 for credit report with a credit score. The element affecting the cost structure for credit bureau services is labor cost and software cost used in this industry. Credit bureau services come with various features, such as identity theft insurance and card activity alerts which require investment in software and acquiring labor.
Countries such as the United States, Canada, the United Kingdom, India, and Australia are preferred business destinations for these services. People in these countries give significant importance to credit scores which determine their financial competency and self-esteem. One of the essential sourcing practices for this category is engaging and negotiating with more than one supplier to acquire a holistic package of services. For instance, different credit bureau companies are providing a different set of services with credit report services. Experian can provide services such as credit scores and reports along with offering loans. In contrast, CRIF High Mark can offer credit scores and reports along with analytics services such as the deduplication platform. Therefore, businesses are required to negotiate and source the appropriate suppliers to get a whole sum report at affordable prices. Other sourcing practices considered in the category are competitor pricing strategies evaluation and payment terms.
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Credit Bureau Services Procurement Intelligence Report Scope
• Growth Rate: CAGR of 12.6% from 2024 to 2030
• Pricing growth Outlook: 3% - 5% (Annually)
• Pricing Models: Subscription pricing model
• Supplier Selection Scope: Cost and pricing, Past engagements, Productivity, Geographical presence
• Supplier Selection Criteria: Individual and Commercial Credit Report Services, Microfinance Credit Information Report, Credit Report Verification Services, Additional services (Loan Report, Score Simulator, Membership Access), operational capabilities and others
• Report Coverage: Revenue forecast, supplier ranking, supplier matrix, emerging technology, pricing models, cost structure, competitive landscape, growth factors, trends, engagement, and operating model
Key companies
• CRIF High Mark Credit Information Services Pvt. Ltd
• Equifax Inc., Experian PLC
• Innovis (CBC Companies)
• TransUnion LLC
• Credit Bureau Malaysia Sdn. Bhd.
• Qatar Credit Bureau
• The Saudi Credit Bureau (SIMAH)
• Credit Bureau Singapore
• National Credit Bureau Company Limited (Credit Bureau)
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