Credit Bureaus & Rating Agencies in the US - Industry Market Research Report

Credit Bureaus & Rating Agencies in the US - Industry Market Research Report

  • March 2021 •
  • 54 pages •
  • Report ID: 184497 •
  • Format: PDF
Reporting back: The number of businesses will likely rise, supporting demand for industry services

Abstract

Credit Bureaus & Rating Agencies in the US

The Credit Bureaus and Rating Agencies industry exhibits a high level of market share concentration, with the four largest players (Experian PLC, TransUnion, S&P Global Inc. and Moody’s Corporation) dominating the industry. Over the five years to 2019, these operators have held a firm grip on their industry position due to their size and reputation.

Acquisitions reinforce leaders’ position

• In 2016, Experian acquired CSIdentity Corporation, integrating the identity protection services with existing consumer credit services.

• TransUnion acquired Callcredit Information Group in 2018, a UK-based company. The acquisition has expanded TransUnion’s reach and given them insight into global markets.

Reputation drives competition

• Due to the industry’s high market share concentration, reputation remains a focal point for industry customers choosing between operators. As such, industry players strive for designation from the Securities Exchange Commission (SEC) as a Nationally Recognized Statistical Rating Organizations (NRSROs). However, there is a finite amount of NRSRO designations given by the SEC, meaning industry operators compete for these titles. As a result, larger companies tend to maintain this status, as they have more resources to comply with industry regulation, keeping the industry highly concentrated.

Higher quality products demand more employees
• Product quality has become one of the most important competitive aspects of the industry following the debt crisis. Therefore, industry operators have been expanding their workforce to comply with industry regulation and stay on the cutting edge of statistical analysis. This employee expansion has encroached on industry profit by increasing wage expenses. However, larger industry players benefit from economies of scale and are able to taper the negative effect of these costs, alleviating margin pressure moving forward.

This industry comprises operators that provide information, outlooks and ratings on the creditworthiness of particular companies, individuals, securities or financial institutions. The industry can be divided into two primary groups: credit bureaus and credit rating agencies (CRAs). Credit bureaus offer services related to consumer credit information, while CRAs generally focus on businesses, governments, securities and financial markets.

This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.
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