Table of Contents
Executive Summary
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- Overview
- The issues
- Two thirds of consumers check their credit score more than once per year
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- Figure 1: Credit monitoring frequency, May 2018
- More than a quarter of consumers have disputed an error on their credit report
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- Figure 2: Interest in credit services, May 2018
- Almost half of consumers fear their credit will be impacted by identity theft
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- Figure 3: Attitudes toward credit scores, May 2018
- The opportunities
- Consumers feel bad credit scores are hard to rectify
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- Figure 4: Attitudes toward credit scores, May 2018
- Young consumers more likely to use credit-building products
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- Figure 5: Interest in credit-building product, by age, May 2018
- Consumers with five or more credit cards check scores the most
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- Figure 6: Credit monitoring frequency, by number of credit cards owned, May 2018
- What it means
The Market – What You Need to Know
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- The roots of credit reporting run deep
- Legislative changes bring some benefits, while adding risk
- Average credit scores are on the rise
- Fraud and identity theft complaints on a slight downward trend
Market Breakdown
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- Credit reporting: a brief history
- Retail Credit Company, the birth of the modern credit bureau
- Fair Credit Reporting Act (1970)
- Dodd-Frank rollback offers a mixed bag for consumers
Market Factors
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- Average credit scores are on the rise
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- Figure 7: Average consumer credit score, October 2005-April 2017
- An aging America
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- Figure 8: US population, by age, 2015, 2020, 2025
- Fraud and identity theft complaints on a slight downward trend
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- Figure 9: Identity theft and fraud complaints, 2013-16
Key Players – What You Need to Know
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- Equifax data breach shook the industry; provides teaching moment
- Credit scoring errors are rampant
- Consumers have a host of free options
- Alternate credit scoring models on the horizon
What’s Struggling?
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- Equifax data breach exposed 143 million Americans
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- Figure 10: USAA email campaign, October 2017
- Credit reporting errors are rampant
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- Figure 11: Actions taken regarding credit report, May 2018
What’s Happening?
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- Consumers have many free options for identity and credit monitoring services
- Credit card issuers
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- Figure 12: Chase email, Chase Credit Journey, June 2018
- Figure 13: American Express email, July 2018
- Figure 14: Capital One email, June 2018
- Third-party sites
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- Figure 15: Credit Karma email, May 2018
- Figure 16: Credit Sesame online advertisement, July 2018
- Governmental intervention
- LifeLock’s direct mail strategy is responsive to recent data breaches
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- Figure 17: LifeLock direct mail volume relative to data breaches, January 2017-May 2018
- Experian’s State of Credit Report seeks to educate consumers
What’s Next?
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- Alternate credit scoring models aim to account for “credit invisibles”
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- Figure 18: Affirm online advertisement, July 2018
- Identity theft and credit monitoring services look to the Dark Web
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- Figure 19: Discover direct mail campaign, July 2018
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- Figure 20: LifeLock email, July 2018
The Consumer – What You Need to Know
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- Most consumers check credit scores regularly, but many never do
- Majority of consumers reported credit score increases in the past year
- Men are more likely to monitor multiple credit bureaus
- More than a quarter of consumers have disputed an error on their credit report
- Almost half of consumers fear identity theft may negatively impact their credit score
Credit Monitoring Frequency
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- Two-thirds of consumers check their credit score more than once per year
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- Figure 21: Credit monitoring frequency, May 2018
- Fathers are checking their scores the most
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- Figure 22: Credit monitoring frequency, by gender and parental status, May 2018
- Investable assets correlate with credit score monitoring frequency
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- Figure 23: Credit monitoring frequency, by household investable assets, May 2018
- Consumers with five or more credit cards check scores the most
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- Figure 24: Credit monitoring frequency, by number of credit cards owned, May 2018
Interest in Credit Monitoring Services
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- Most consumers have not paid for a full credit report
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- Figure 25: Interest in paying for a credit report, by gender, May 2018
- Younger consumers are most interested in paying for credit and identity monitoring
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- Figure 26: Interest in paying for identity theft monitoring, by age, May 2018
- More than a quarter of consumers have disputed an error on their credit report
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- Figure 27: Interest in credit services, May 2018
- Young consumers more likely to use credit-building products
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- Figure 28: Interest in credit-building product, by age, May 2018
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- Figure 29: Capital One email campaign, February 2016
Credit Monitoring Habits
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- Men are more likely to check multiple credit bureaus
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- Figure 30: Credit monitoring habits, by gender, May 2018
- Consumers with incomes of $50K-75K more are more proactive
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- Figure 31: Credit monitoring habits, by household income, May 2018
- More than 1 in 10 consumers have actively avoided checking their score
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- Figure 32: Credit monitoring habits, by age, May 2018
- Consumers with lower credit are more likely to use third-party sites
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- Figure 33: Credit monitoring habits, by self-reported credit score, May 2018
- Older consumers are more likely to say they receive credit score updates from their card issuers
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- Figure 34: Credit monitoring habits, by age, May 2018
Changes in Credit Score
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- Most consumers say their scores remained the same or improved a little
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- Figure 35: Credit score change in past year, May 2018
- Male and Hispanic consumers more likely to report credit score improvement
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- Figure 36: Credit score change in past year, by gender May 2018
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- Figure 37: Credit score change in past year, by Hispanic origin, May 2018
Attitudes toward Credit Scores
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- Most consumers believe their credit score is the main predictor of obtaining credit
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- Figure 38: Knowledge of credit score use, May 2018
- Most consumers want to improve their credit score
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- Figure 39: Attitudes toward improving credit scores, May 2018
- Almost half of consumers fear identity theft will impact their credit
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- Figure 40: Concerns about identity theft, May 2018
- Many consumers see credit scoring as an invasion of privacy
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- Figure 41: Attitudes toward credit scoring fairness, by Hispanic origin, May 2018
Perceptions of Credit Scoring
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- Consumers agree on how credit scores are derived
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- Figure 42: Credit scoring factors, ranked, May 2018
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- Figure 43: Mint email, July 2018
- Consumers feel bad credit scores are hard to rectify
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- Figure 44: Attitudes toward credit scores, May 2018
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
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