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Credit Monitoring - UK - March 2019

Covered in this report

For the purposes of this report, the terms “credit scoring” and “credit monitoring” are used interchangeably to describe the services people use to access information about their credit score and credit history.

This report focuses on consumer use of credit monitoring services, rather than B2B (Business-to-Business) services. It does not look at the role of credit references agencies in detail but instead focuses on consumer-facing brands and providers

“Mintel expects more and more people to start using credit scoring services over the coming years. Consumers will continue to be interested in using their own data to help inform financial decisions, especially among younger age groups.As managing finances moves away from a focus on individual products, to a platform-type approach using open banking technology, access to credit scoring services will become an integral part of consumer finances.”
– Deborah Osguthorpe, Category Director, UK Financial Services Research

This report looks at the following areas:

  • Subscription-based services need to differentiate to survive
  • Scope for lenders and banks to extend into credit check services
  • Improving levels of engagement among financial strugglers

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Table of contents

  1. Overview

      • Products covered in this Report
      • Executive Summary

          • The market
            • Strong growth in the numbers checking their credit score
              • Figure 1: Use of credit monitoring services, November 2018 and October 2016
            • Appetite for credit has declined
              • Figure 2: Net consumer credit flow, January 2016 to December 2018
            • Data security creates opportunities and threats
              • GDPR pushes data transparency up the agenda
                • Companies and brands
                  • Experian is most widely used but ClearScore is gaining ground fast
                    • Figure 3: Use of selected credit check and monitoring services among credit score users, November 2018
                  • Experian and ClearScore merger halted, while Credit Karma enters UK market
                    • Free credit reports dent traditional subscription model
                      • Credit monitoring as a tool for engagement
                        • Renters receive a credit score boost
                          • Open banking is driving innovation in the sector
                            • ATL adspend up by 24% in 2017/18, Experian leads the way
                              • The consumer
                                • People are more likely to check their credit score than not
                                  • Figure 4: Use of credit monitoring services, by generation, November 2018
                                • Scope to increase engagement among financial strugglers
                                  • Younger Millennials represent key group for new business
                                    • Looking beyond the direct link with credit applications
                                      • Figure 5: Reasons for not using credit check services in the next 12 months, November 2018
                                    • Borrowing drives use among under-45s; over-45s look to fraud detection
                                      • Figure 6: Reasons people would use credit monitoring services, November 2018
                                    • A third of users are unwilling to pay for premium services
                                      • Figure 7: Interest in features that would prompt people to pay for premium credit report services, November 2018
                                    • Most trust providers to keep their data safe
                                      • Banks have an opportunity to extend their role
                                        • Figure 8: Attitudes towards credit monitoring services, November 2018
                                      • What we think
                                      • Issues and Insights

                                        • Subscription-based services need to differentiate to survive
                                          • The facts
                                            • The implications
                                              • Scope for lenders and banks to extend into credit check services
                                                • The facts
                                                  • The implications
                                                    • Improving levels of engagement among financial strugglers
                                                      • The facts
                                                        • The implications
                                                        • The Market – What You Need to Know

                                                          • Strong growth in the numbers checking their credit score
                                                            • Appetite for credit has declined
                                                              • Data security creates opportunities and threats
                                                                • GDPR and open banking push transparency up the agenda
                                                                • Market Size

                                                                  • Use of credit checking services shows strong growth
                                                                    • Figure 9: Use of credit monitoring services, November 2018 and October 2016
                                                                  • Regular credit checkers are driving growth
                                                                    • Figure 10: Population estimates of consumer use of credit monitoring services, November 2018 and October 2016
                                                                • Market Drivers

                                                                  • Consumer confidence has dipped
                                                                    • Figure 11: Financial Confidence Index, January 2016 to January 2019
                                                                  • Consumer credit lending weakens
                                                                    • Figure 12: Net consumer credit flow, January 2016 to December 2018
                                                                  • Mortgage lending continues to flatline
                                                                    • Figure 13: Value of lending secured on dwellings, January 2016-December 2018
                                                                  • Individual insolvencies exceed 115,000 in 2018
                                                                    • Figure 14: Individual insolvencies in England and Wales, by type, 2015-18 (seasonally adjusted)
                                                                  • Data security
                                                                    • Security remains top priority for finance customers
                                                                      • Equifax data breach – damaging but not devastating
                                                                        • GDPR provides an opportunity to bolster relations with consumers
                                                                          • Open banking and credit scoring are a perfect match
                                                                          • Companies and Brands – What You Need to Know

                                                                            • Experian is most widely used but ClearScore is gaining ground fast
                                                                              • Experian and ClearScore merger halted, while Credit Karma enters UK market
                                                                                • Free credit reports dent traditional subscription model
                                                                                  • Credit monitoring as a tool for engagement
                                                                                    • Renters receive a credit score boost
                                                                                      • Open banking is driving innovation in the sector
                                                                                        • ATL adspend up by 24% in 2017/18, Experian leads the way
                                                                                        • Consumer Use of Credit Score Brands

                                                                                          • Experian remains dominant but ClearScore is now a major challenger
                                                                                              • Figure 15: Use of selected credit check and monitoring services among credit score users, November 2018
                                                                                            • ClearScore rivals Experian among regular users
                                                                                                • Figure 16: Use of selected credit check and monitoring services, by frequency of use, November 2018
                                                                                              • 29% have used more than one site to check their credit score
                                                                                                • Figure 17: Number of credit check and monitoring services used, November 2018
                                                                                            • Competitive Strategies

                                                                                              • Experian and ClearScore merger falls through
                                                                                                • CMA concerns halt proposed merger between sector’s two largest players
                                                                                                  • Experian revenue under pressure as subscription income declines
                                                                                                    • US firm Credit Karma agrees to buy Noddle…
                                                                                                      • …and commits to offering free access to services
                                                                                                        • Free credit reports dent traditional subscription model
                                                                                                          • Credit monitoring as a tool for engagement
                                                                                                            • Moving from product comparison to credit matching
                                                                                                              • TotallyMoney launched live credit check services in 2017
                                                                                                              • Launch Activity and Innovation

                                                                                                                • Renters get a credit score boost through rental recognition scheme
                                                                                                                  • Open banking provides scope to improve access to credit…
                                                                                                                    • …and to speed up credit applications
                                                                                                                      • ClearScore introduces open banking solution, OneScore
                                                                                                                      • Advertising and Marketing Activity

                                                                                                                        • Adspend grew strongly in 2017/18
                                                                                                                          • Figure 18: Total above-the-line, online display, and direct mail advertising expenditure by credit monitoring companies, 2015/16-2017/18
                                                                                                                        • Experian is by far the biggest spender
                                                                                                                          • Noddle shunned ATL adspend in 2017/18, but TotallyMoney saw strong growth
                                                                                                                            • Figure 19: Total above-the-line, online display, and direct mail advertising expenditure on credit monitoring companies by top six advertisers, 2015/16-2017/18
                                                                                                                          • Adspend is mainly split between TV and Digital
                                                                                                                            • Figure 20: Total above-the-line, online display, and direct mail advertising expenditure on credit monitoring companies by media type, 2015/16-2017/18
                                                                                                                          • Nielsen Ad Intel coverage
                                                                                                                          • The Consumer – What You Need to Know

                                                                                                                            • People are more likely to check their credit score than not
                                                                                                                              • Scope to increase engagement among financial strugglers
                                                                                                                                • Younger Millennials represent key group for new business
                                                                                                                                  • Looking beyond the direct link with credit applications
                                                                                                                                    • Borrowing drives use among under-45s; over-45s look to fraud detection
                                                                                                                                      • A third of users are unwilling to pay for premium services
                                                                                                                                        • Most trust providers to keep their data safe
                                                                                                                                          • Banks have an opportunity to extend their role
                                                                                                                                          • Use of Credit Monitoring Services

                                                                                                                                            • People are more likely to check their credit score than not
                                                                                                                                              • Figure 21: Use of credit monitoring services, November 2018
                                                                                                                                            • Millennials are frequent checkers, while Gen X are occasional users
                                                                                                                                              • Figure 22: Use of credit monitoring services, by generation, November 2018
                                                                                                                                            • The financially healthy are more likely to engage
                                                                                                                                              • Scope to increase engagement among private renters
                                                                                                                                                • Younger Millennials represent the key group for new business
                                                                                                                                                  • Figure 23: Likelihood to use credit check services in the next 12 months, November 2018
                                                                                                                                              • Barriers to Using Credit Score Services

                                                                                                                                                • Looking beyond the direct link with credit applications
                                                                                                                                                  • Financial wellbeing is becoming a key marketing message
                                                                                                                                                    • Figure 24: Reasons for not using credit check services in the next 12 months, November 2018
                                                                                                                                                  • A lack of awareness and knowledge are only minor barriers
                                                                                                                                                  • Prompts to Use Credit Monitoring Services

                                                                                                                                                    • Borrowing is main driver of credit check activity…
                                                                                                                                                      • …but over-45s look to fraud protection
                                                                                                                                                        • Opportunities to widen services to provide a financial security check
                                                                                                                                                          • Figure 25: Reasons people would use credit monitoring services, November 2018
                                                                                                                                                      • Interest in Features of Premium Credit Monitoring Services

                                                                                                                                                        • A third rule out paying for services
                                                                                                                                                          • Understanding data and fraud detection hold wide appeal
                                                                                                                                                            • Figure 26: Interest in features that would prompt people to pay for premium credit report services, November 2018
                                                                                                                                                          • Renters are looking for advice
                                                                                                                                                          • Attitudes towards Credit Monitoring Services

                                                                                                                                                            • Majority of users trust services to keep their data safe
                                                                                                                                                              • Figure 27: Attitudes towards credit monitoring services, November 2018
                                                                                                                                                            • Consumers appreciate the ability to compare credit products
                                                                                                                                                              • Opportunities for banks to extend their role in the market
                                                                                                                                                                  • Figure 28: Credit Monitoring – CHAID – Tree output, November 2018
                                                                                                                                                              • Appendix – Data Sources, Abbreviations, and Supporting Information

                                                                                                                                                                  • Abbreviations
                                                                                                                                                                    • Consumer research methodology
                                                                                                                                                                      • CHAID analysis methodology
                                                                                                                                                                        • Figure 29: Credit Monitoring – CHAID – Table output, October 2018

                                                                                                                                                                    Credit Monitoring - UK - March 2019

                                                                                                                                                                    US $2,552.20 (Excl.Tax)