Table of Contents
Executive Summary
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- COVID-19 disruption to personal finances offers opportunities for growth
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- Figure 1: Short, medium and long-term impact of COVID-19 on credit monitoring, 18 January 2021
- The Market
- Use of credit monitoring services continues to grow, driven by regular checkers
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- Figure 2: Use of credit monitoring services, 2016-20
- Consumer credit hits record lows as lockdown hits spending
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- Figure 3: Monthly changes of net consumer credit lending, October 2015-October 2020
- Temporary support for borrowers puts pressure on lenders to treat customers fairly
- Companies and brands
- Experian remains the best-known brand, but ClearScore continues to gain ground
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- Figure 4: Use and awareness of selected credit check and monitoring services among credit score users, November 2020
- Experian Boost leverages Open Banking to build fairer scores
- ClearScore Protect taps into data security concerns
- NatWest Group pioneers bank-backed free access to credit scores
- COVID-19 disrupts advertising and marketing
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- Figure 5: Total above-the-line, online display and direct mail advertising expenditure by credit monitoring companies, 2015/16-2019/20
- The consumer
- Disruption to household finances could boost interest in credit scores
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- Figure 6: Impact of COVID-19 on household finances, 8-13 January 2021
- More than one in four regularly check their credit score
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- Figure 7: Use of credit monitoring services, November 2020
- Younger age groups and those disrupted by COVID-19 are a key group for growth
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- Figure 8: Likelihood of checking credit scores, by impact of COVID-19 on finances, November 2020
- Applying for credit is no longer the top reason to check credit scores
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- Figure 9: Reasons to check credit scores, November 2020
- Opportunity to attract users of less common types of credit
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- Figure 10: Reasons to check credit scores when applying for credit/finance, November 2020
- Free services are deemed to meet most customers’ needs
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- Figure 11: Perceptions of credit monitoring services, November 2020
- Importance of data security likely to increase as COVID accelerates shift to online
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- Figure 12: Attitudes towards credit monitoring services, November 2020
- Huge potential for services beyond credit
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- Figure 13: Potential for extending credit monitoring services, November 2020
Issues and Insights
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- COVID-19 disruption could increase engagement and drive growth…
- …and highlights the importance of real-time data
- Building the habit among younger generations is key for expansion
The Market – Key Takeaways
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- Regular checkers drive impressive growth
- Difficult economic climate to continue impacting the market
- Regulatory pressure on lenders to treat customers fairly
Market Size
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- COVID-19’s disruption of personal finances offers opportunities for growth
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- Figure 14: Short, medium and long-term impact of COVID-19 on credit monitoring, 18 January 2021
- Use of credit monitoring services continues to grow…
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- Figure 15: Use of credit monitoring services, 2016-20
- …driven by regular checkers
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- Figure 16: Population estimates of consumer use of credit monitoring services, 2016-20
- Innovation and product development are key for future expansion
- Learnings from the last recession
Market Drivers
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- Rising unemployment will impact creditworthiness
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- Figure 17: Unemployment rate (November 2020 central forecast), 2015-25
- Consumer credit hits record lows as lockdown hits spending…
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- Figure 18: Monthly changes of net consumer credit lending, October 2015-October 2020
- …and disrupts the property market
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- Figure 19: Monthly changes of net secured lending to individuals, October 2015-October 2020
- COVID-19 leads to spike in individual insolvencies
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- Figure 20: Individual insolvencies in England and Wales, by type, January 2019-October 2020
- Brexit deal likely to improve confidence, but uncertainty remains
The Regulatory Environment
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- Temporary support for borrowers shines light on credit scores…
- …putting pressure on providers to treat customers fairly
- New advertising rules for Buy Now Pay Later schemes
Companies and Brands – Key Takeaways
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- Experian remains the best-known brand, but ClearScore continues to gain ground
- Experian Boost leverages Open Banking to build fairer scores
- ClearScore Protect taps into data security concerns
- NatWest Group pioneers bank-backed free access to credit scores
- COVID-19 disrupts advertising and marketing
Awareness and Usage of Credit Score Brands
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- Experian remains the best-known brand…
- …but ClearScore continues to gain ground
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- Figure 21: Use of selected credit check and monitoring services among credit score users, November 2020
- Smaller brands face awareness challenges
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- Figure 22: Awareness and use of selected credit check and monitoring services among credit score users, November 2020
Competitive Strategies and Innovation
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- Experian Boost uses Open Banking to help consumers improve their scores
- ClearScore Protect monitors the dark web for stolen passwords
- NatWest Group pioneers bank-backed free access to credit scores
- Capital One to revamp its CreditWise service
- Exploring the potential beyond credit
- TotallyMoney ventures into car finance and energy switch
- Credit Karma in the US tackles ‘every step of the financial journey’
Advertising and Marketing Activity
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- Advertising in the recovery period
- Adspend falls sharply in 2019/20
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- Figure 23: Total above-the-line, online display and direct mail advertising expenditure by credit monitoring companies, 2015/16-2019/20
- Experian continues to be the highest spender
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- Figure 24: Total above-the-line, online display and direct mail advertising expenditure by credit monitoring companies, by brand, 2015/16-2019/20
- TV is the dominant channel for ATL advertising
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- Figure 25: Total above-the-line, online display and direct mail advertising expenditure by credit monitoring companies, by media type, 2019/20
- Nielsen Ad Intel coverage
The Consumer – Key Takeaways
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- COVID-19 disruption can boost demand for credit monitoring services
- People are more likely to check their credit score than not
- Applying for credit is no longer the top reason to check credit scores
- Free services are deemed to meet customers’ needs
- Huge potential for services beyond credit
Impact of COVID-19 on Consumer Behaviour
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- COVID-19 has disrupted the finances of millions of households
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- Figure 26: Impact of COVID-19 on household finances, 8-13 January 2021
- Confidence mimics lockdown trajectory
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- Figure 27: The Financial Confidence Index, January 2016-January 2021
- Deterioration of household finances could boost interest in credit scores
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- Figure 28: Changes in household finances, January 2016-January 2021
- COVID disrupts debt repayment intentions
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- Figure 29: Actual and planned debt activity, January 2016-January 2021
Use of Credit Monitoring Services
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- More than one in four regularly check their credit score
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- Figure 30: Use of credit monitoring services, November 2020
- 25-34s are the most engaged age group
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- Figure 31: Use of credit monitoring services, by age, November 2020
Likelihood of Checking Credit Scores
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- Young people are a key group for growth
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- Figure 32: Likelihood of checking credit scores, November 2020
- COVID-19 disruption can lead to more people checking their scores
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- Figure 33: Likelihood of checking credit scores, by impact of COVID-19 on finances, November 2020
Reasons to Check Credit Scores
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- Applying for credit is no longer the top reason to check credit scores
- Concerns about fraud provide an opportunity to increase frequent use
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- Figure 34: Reasons to check credit scores, November 2020
- Majority have more than one reason to check scores
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- Figure 35: Repertoire of reasons to check credit scores, November 2020
- Opportunity to attract users of less common types of credit
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- Figure 36: Reasons to check credit scores when applying for credit/finance, November 2020
Perceptions of Credit Monitoring Services
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- Free services are deemed to meet customers’ needs…
- …while paid-for services are associated with more complexity
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- Figure 37: Perceptions of credit monitoring services, November 2020
- Bank-backed services are best placed to tackle the security angle
- Importance of lack of bias could be explored when extending services
Attitudes towards Credit Monitoring Services
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- Majority are happy with a free service…
- …but there’s room to build relationships with more than one brand
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- Figure 38: Attitudes towards credit monitoring services, November 2020
- Importance of data security likely to increase as COVID accelerates shift to online
Potential for Extending Credit Monitoring Services
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- Huge potential for services beyond credit
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- Figure 39: Potential for extending credit monitoring services, November 2020
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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