Credit Monitoring Analysis, Pt. 2

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Credit Monitoring Aggregators: Regulatory Concerns and Barriers

Barriers that a company that is considering launching a credit monitoring aggregator include consumer access, data scope and usability, informed consent and control, security, access transparency, accuracy, and unauthorized access. These areas of regulation are essential to the success of the credit monitoring aggregator application. All of these regulations are set by the Dodd-Frank Act and the Executive Order 13772 on Core Principles for Regulating the United States Financial System and can have serious legal repercussions if not observed.


Consumer Access
  • Upon request, consumers can obtain information regarding their ownership and product or service use from a credit monitoring site and information must be available promptly. Authorizing a trusted third party to obtain data on their behalf will be beneficial to the consumer based on the services and products offered. Account terms and agreements protect authorized consumer access, promoting consumers’ interests, which allows consumers to grant access to their personal account information. This form of access does not require the consumer to provide their account credentials to third parties, which may not be trusted sites.

Data Scope and Usability
  • Data that is subject to the consumer and consumer authorized access may include transactions or consumer usage of any kind. It could include the terms of an account like a fee schedule or any form of interest paid, consumer benefits such as earned interest, or account-based rewards. This information is made available in forms consumers or authorized parties can readily use. Third parties that obtain authorization can only access data that is necessary to provide their services, and the information is available to them only for as long as it is needed to perform such a service.

Informed Consent and Control
  • The terms of authorization and use must be explicitly outlined to the consumer regarding data access and scope, data storage, data use, and data disposal. The words can not be overly broad and must be disclosed and understood by the consumer. The terms of the agreement allows the consumer to take control of who has access to their data. Consumers must not be coerced into providing access to third parties that are employing fear mongering or fear of loss tactics, and they need to understand that the access can be revoked at any time. Data sharing revocations are implemented by the provider and done promptly at the discretion of the consumer.

  • Consumer data must be protected from security breaches, and data must be formatted in such a way to prevent harm to the consumer. Data must be stored appropriately and used in a secure manner. All parties that store, transmit, access, or dispose of consumer data must use strong security measures to mitigate risks of breaches, errors, unauthorized access, and fraud, only sending data to third parties with such protections in place. These security measures must continue to update, as new threats may arise.

Access Transparency
  • Consumers must be able to verify which third parties have been authorized by them to access or use information regarding their data. This availability must remain throughout the third party’s access to the consumer’s data. The frequency in which the consumer’s data is accessed must also be available to the consumer for the duration of the period in which the third party has access to information that is used or stored.

  • Consumers should be able to expect a specific level of accuracy, and regarding the data they access or authorize third parties to have access to, the data must be up-to-date. The consumer should also have the ability to dispute any inaccuracies at any time.

Unauthorized Access
  • Consumers must have access to practical means in disputing or resolving instances of illegal data sharing, access, or unauthorized payments made as a result of unauthorized shared data. Failing to comply with this obligation could result in a loss of consumers. Identifying the party that gained unauthorized access is not required for remediation to occur. The unauthorized parties are held accountable for this access and will face serious consequences.


We visited the U.S. Department of Treasury to research information on regulations that are set by the proper authorities, and we found information regarding these regulations in a document titled 'Executive Order 13772 on Core Principles for Regulating the United States Financial System'. This document delved into the requirements for non-bank financial institutions, fintech and data aggregator applications, and other possible innovations in this field. We found that the Dodd-Frank Act of 2010 protects consumers' credit in the event of a recession, and the Gramm-Leach-Bliley Act enforces the requirements for consumer privacy and consent, which plays a major role in collecting consumer data to create a credit monitoring aggregator. Based on the given facts, we then made an informed decision on the requirements set for the launching of a credit monitoring aggregator.
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Credit Monitoring Aggregators: Buying and Shopping Habits

The buying habits of US consumers who use credit monitoring aggregators are primarily motivated by basic human needs and amenities, social factors, future financial benefits, and memorable experiences. Consumers use online shopping platforms but also choose to use in-person, cash-based platforms. Especially among younger generations and women, using cash may be a way of avoiding credit card debt and more tangibly following a budget.

Prioritizing Food, Rent, and Healthcare:

  • Many users of credit monitoring aggregators appear to make purchasing choices based largely on necessity, followed by a wish for specific experiences. Credit Sesame found, based on a survey of 1,000 of its users, that the most common causes of credit card debt were (in order) healthcare, travel, and shopping.
  • Many millennial users of credit monitoring aggregators are most concerned about paying their housing costs, followed by concern for food and other groceries, with the ability to afford social experiences ranking third.
  • Money stress regarding necessities is significantly more prevalent in women than in men. Additionally, women typically have much less "discretionary income" than men after paying household bills.

Spending to Align with Social and Peer Pressures:

  • A disproportionately high number of millennials use credit monitoring aggregators, and, according to a Credit Karma/Qualtrics study, 39% of millennials report that they have gone into debt in order to maintain the same lifestyle as their friends. This most typically takes the form of paying for experiences, but it can also mean buying tangible goods, including food.
  • Influencers are beginning to have a major impact across markets; their content is nearly three times more effective than typical marketing, at least in "paid channels." This is not just true of influencers with enormous numbers of followers — companies are beginning to use influencers with fewer than 5,000 followers as well.
  • About one quarter of Americans feel that buying presents and other holiday-related expenses are a good reason for going into credit card debt. 20% of Americans regretted a holiday purchase, with much of this regret focused on millennials (Baby Boomers were only one third as likely as millennials to regret a purchase).

Investing in Future Benefits:

  • Millennials and Gen X members who use Credit Sesame both placed a high financial value on higher education, although this varied slightly by generation. 76% of millennials felt that college tuition was a fair price, in part due to the potential for higher future salaries; 68% of Gen X members agreed.
  • Both college students and their parents are optimistic that, especially for those with more technical or science-based majors, students will be financially successful in the future. This is particularly true of parents coming from a lower-income background themselves.

Buying Memorable Experiences and Luxury Goods:

  • WalletHub conducted a "nationally representative online survey" and discovered that 84% of consumers planned to redeem their credit rewards for either travel expenses (43%) or cash back (41%); these were by far the top two preferences, with gift cards coming in third at 10% of consumers.
  • Some Americans who use credit monitoring aggregators highly value luxury food purchases; in a Credit Karma survey, only about a quarter of Baby Boomers said they would be willing to give up chocolate or alcohol for a year in exchange for clearing their credit card debt. Between 33 and 40% of millennials and Gen X members would be willing to do the same.

Choosing Purchasing Venues to Combat Financial Stress:

  • Almost all Americans have shopped online, and about 15% do so at least once a week. Online shopping is a continually growing market, although a significant proportion of users and potential users of credit monitoring aggregators choose to use cash. Others want their credit cards and cash transactions integrated.
  • A preference for cash may be particularly true of younger consumers who are more concerned about making ends meet and sticking with a budget. Women and city dwellers are also more likely than other groups to feel financially unstable, with 51% of people living in cities making financial stability their main goal; those who lived outside of cities were much more concerned with adding to existing savings.
  • In the United States, 79% of consumers have at least one credit card, although this varies considerably depending on demographic groups. According to this same survey by the Federal Reserve, respondents who use a bank would split relatively evenly between using cash (33%), a credit card (29%), or a debit card (38%) to "make a $10 purchase at a local store."
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Credit Monitoring Aggregators: Over- and Under-Served Markets

An analysis of credit monitoring aggregators targeting the U.S. market found that there is currently a lot of saturation in the Millennial and Gen X segments, however, the Baby Boomer and Gen Z segments are significantly less saturated. The male and female market segments are fairly equally saturated, however, the male segment is slightly more saturated. Lastly, in terms of geography, it appears the southeast and lower New England U.S. regions are significantly more saturated, whereas the western and mid-western regions are the least saturated. A deep dive of this analysis has been presented below.

Analysis Sample

  • Analysis Method: For this research, SimilarWeb analytics was used to examine the web traffic analytics of visitors to various credit monitoring platforms in the U.S. SimilarWeb provided information on the age and gender of each credit monitoring aggregator's website visitors. Google Trends was used to analyze which consumers have been searching for these credit monitoring aggregators, broken down by state, as well as for general key terms related to credit monitoring. These results were collectively assessed to understand which areas of the market are likely being over-served and under-served in terms of consumer demographics.
  • Company 1: Credit Karma is a credit monitoring aggregator that receives over 97% of its traffic from the U.S.
  • Company 2: Credit Sesame is a credit monitoring aggregator that receives over 98% of its traffic from the U.S.
  • Company 3: is a credit monitoring aggregator that receives over 90% of its traffic from the U.S.

Market Focus: Age

  • Credit Karma: The majority of Credit Karma visitors are between the ages of 25-34 (25.66%) and 35-44 (22.31%). The fewest number of visitors are in the 65+ group (6.55%) and the 55-64 group (11.60%). Additionally, the 45-54 group has a share of 15.71% while the 18-24 group has a share of 18.17%.
  • Credit Sesame: The majority of Credit Sesame visitors are between the ages of 25 and 34 (22.24%), 35 and 44 (22.93%) and 45 and 54 (19.08%). The fewest number of visitors are in the 65+ group (7.88%). Meanwhile, the 55-64 group has a share of 14% and the 18-24 group has a share of 13.88%.
  • The majority of visitors are between the ages of 24 and 34 (27.46%) and 35 and 44 (22.88%). The fewest number of visitors are in the 65+ group (5.65%) and the 55-64 group (10.35%). Additionally, the 45-54 group has a share of 16.05% and the 18-24 group has a share of 17.60%.

Market Focus: Gender

  • Credit Karma: Among Credit Karma visitors, 50.46% are male and 49.54% are female.
  • Credit Sesame: Among Credit Sesame visitors, 47.86% are male and 52.32% are female.
  • Among visitors, 53.96% are male and 46.04% are female.

Market Focus: Geography

  • Credit Karma: According to Google Trends, the highest level of interest in Credit Karma is coming from the states of Mississippi, Alabama, West Virginia, Georgia, and South Carolina. The lowest level of interest is coming from Massachusetts, California, Washington D.C., Utah, and Hawaii.
  • Credit Sesame: According to Google Trends, the highest level of interest in Credit Sesame is coming from the states of Mississippi, South Carolina, Alabama, Arkansas, and Georgia. The lowest level of interest is coming from Alaska, California, Hawaii, Washington D.C., and Utah.
  • According to Google Trends the highest level of interest in is coming from the states of Mississippi, South Carolina, West Virginia, Delaware, and Alabama. The lowest levels of interest are coming from Iowa, Massachusetts, New Hampshire, Hawaii, and Connecticut.
  • According to Google Trends, the highest level of interest for the search term 'credit monitoring' is coming from Washington D.C., Virginia, Georgia, Maryland, and New Hampshire. The lowest level of interest is coming from Alaska, Delaware, Wyoming, North Dakota and Wisconsin.
  • According to Google Trends, the highest level of interest for the search term 'free credit report' is coming from Alabama, Mississippi, Delaware, Georgia, and Arkansas. The lowest level of interest is coming from North Dakota, Vermont, Minnesota, New Hampshire and Iowa.

Research Strategy

In order to conduct this research, our team first began by attempting to locate any market reports or consumer surveys that provided details on the use of credit monitoring aggregators specifically. However, no such report was located, as most available reports related to this topic focused on credit monitoring services in general, consumer awareness of how credit works, or focused on credit repair services in general. Despite this lack of information, our team was able to triangulate an understanding of market saturation by analyzing the market segment consumer groups that are accessing some leading aggregators in the U.S. and examining their ages, genders, and geographic locations within the country.
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Consumer Motivations: Credit Monitoring Aggregators

Federal consumer protection regulations in the Fair Credit Reporting Act mandate that the three major credit reporting agencies, Equifax, Experian, and TransUnion, provide U.S. consumers with a limited number of free credit reports each year. However, the information in credit reports can change frequently, and credit reports do not include all the information needed to protect consumers from identity theft. As a result, U.S. consumers, especially those looking to repair their credit, may be motivated to use credit monitoring aggregators based on the comparative cost, scope of services, accountability, and financial guidance that these platforms and their services offer.

U.S. Consumers' Legally Mandated Access to Free Credit Reports

  • According to the Federal Trade Commission (FTC), "The Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months." Additionally, due to its 2017 data breach that exposed the personal data of almost 150 million consumers, Equifax agreed to provide six additional free reports each year until 2026.
  • To access these reports, the agencies will require consumers to provide their identifying information, will ask for current and past addresses, as well as other information from consumers' credit files, which each differ between the three agencies. If any of the consumer's information or answers need to be confirmed, it can take significantly longer to receive the credit report from that agency.
  • Outside of the standard free report per credit reporting agency each year, consumers have the legal right to access a free report under the following circumstances: when an application "such as denying [their] application for credit, insurance, or employment... [or if] unemployed and plan to look for a job within 60 days...[or if] on welfare," as well as if there are inaccuracies on the report due to fraud. Financial advisers suggest staggering requests for these free reports throughout the year to effectively monitor your reports for any inaccurate or omitted information.

Motivator to Use Credit Monitoring Aggregators: Cost

  • Because the annual free credit reports that consumers receive from Equifax, Experian, and TransUnion do not include a credit score, the cost can be a deciding factor for consumers considering using a credit monitoring aggregator. Instead of paying 15.95 to Equifax, $14.95 to Experian, or $9.95 to TransUnion each time they want to see their credit score, consumers can access their credit score much more frequently and cost-effectively through free or low-price services from credit monitoring aggregators.
  • Additionally, the limited number of free credit reports consumers can get for free each year from the three credit reporting agencies restricts how regularly they can monitor changes or errors on their credit report. While many financial advisers suggest consumers stagger report requests, when relying on those free reports, consumers will only be able to check one agency's report every two months (ignoring the extra reports Equifax is currently obligated to provide consumers). To request additional reports, consumers may have to pay up to $12.50 per report.
  • In comparison, many credit monitoring aggregators have significantly more cost-effective options to access frequently updated reports. For example, PrivacyGuard's basic plan for $10 per month provides information, updated daily, from all three agencies' reports as well as credit scores. Credit Karma's free services provide report information from Equifax and TransUnion, updated weekly, and credit scores, updated each time consumers log into the platform.

Motivator to Use Credit Monitoring Aggregators: Scope of Services

  • Credit and identity monitoring have increasingly become important resources for U.S. consumers, as their financial data and identifying information are frequently exposed. According to a report from the Identity Theft Resource Center (ITRC), in 2017, "there were 1,579 data breaches exposing nearly 179 million records. That represents a 44% increase in the number of breaches and a 389% increase in records exposed."
  • The IRTC report also indicated, "that the number of credit card numbers exposed in 2017 totaled 14.2 million, up 88% over 2016. In addition, nearly 158 million Social Security numbers were exposed in 2017, an increase of more than eight times the number in 2016."
  • From 2015 to 2016, the number of Americans who submitted complaints about credit card fraud to the Federal Trade Commission doubled, rising to over 32%. Because of the amount of information that consumers have to keep track of, learning that their identifying information has been comprised can often come too late. The information in each of the three agencies' reports differ from one another and can change frequently. As a result, according to the ITRC, "It typically takes three months for the majority of people find out they have been victims of identity theft... [and] 16% of people didn't find out for three years.
  • To monitor all this information over time, consumers have two general options: monitoring their credit themselves using free and/or paid reports from Equifax, Experian, and TransUnion, or using free or paid credit monitoring aggregators to access the same information. Consumers using credit monitoring aggregators often get alerts for any changes to their credit report in real-time, as opposed to checking reports from the free agencies, which can only provide that information after the fact.
  • The downside to using credit monitoring aggregators for consumers is that each platform provides different service combinations. Many free aggregators will only provide limited services, such as only proving one out of the three credit reports, which forces consumers to rely on several of them to have comprehensive credit and identity monitoring.
  • The scope of information provided on each platform may be a significant deciding factor for consumers use choosing between credit monitoring options because security-conscious consumers will want to select the platform that provides them the most comprehensive protection and convenient service. According to a survey from Experian, "as of August 2017...73% said they are very or somewhat concerned their email, financial accounts or social media info could be hacked, up from 69% in a similar survey conducted in 2015."
  • Credit Karma, which has over a third of American adults as members and among the most extensive list of free services, has been expanding its services in response to trends in identity theft. Similarly, to LifeLock, on top of being able to monitor your credit report and score, Credit Karma will also provide alerts when members' identifying information is being sold on the dark web. Additionally, Credit Karma members can provide their bank and credit card account information to be notified of suspicious activity on those accounts as well.

Motivator to Use Credit Monitoring Aggregators: Accountability

  • Many consumers want to monitor their credit to improve their credit score. According to Experian, one in three Americans resolved to improve their credit in 2020. However, according to a survey by LendingTree, as much as 37% of U.S. consumers do not know what steps to take to repair their credit. Credit monitoring with features that help keep their users accountable for credit repair goals may be more attractive to consumers as a result.
  • Several credit monitoring aggregators currently integrate accountability elements into their credit repair features. For example, Credit Sesame financially motivates credit-repairing behavior by offering consumers cash rewards for certain amounts of credit score increases. The platform has reported significant success with improving their members' credit score, citing that, within the first six months, 61% of them see improvements overall, 50% see improvements of over 10 points, and 20% see improvements of over 50 points.
  • Another example, WalletHub provides members with an all-in-one look at their credit using their dashboard, which shows consumers their TransUnion credit score, reported account balances, letter grades for factors that affect their credit score, and offers for debit/credit accounts or loans. These grades will indicate to members what factors are lowering their credit score, such as if their credit utilization or debt load is too high. From the dashboard, members can easily access information for specific accounts to check if the information is accurate.

Motivator to Use Credit Monitoring Aggregators: Financial Guidance

  • Many credit monitoring aggregators also provide consumers with financial product offers, such as credit cards or loans, that the platform's algorithm suggests the consumer is likely to be approved for. Each time consumers submit a credit application, financial institutions pull their credit reports (known as a hard inquiry), which negatively impacts their credit score. The reliability and clarity of financial guidance that credit monitoring platforms provide offer valuable insight to consumers, who want to avoid unnecessary hard inquiries that do not result in an accepted application.
  • Credit Karma, for example, provides recommendations to financial products based on members' credit history. Their process for recommending financial products has been highly effective. The referral fees for approved applications that Credit Karma earned from lenders after approved applications via their site rose from $500 million in 2016 to $680 million in 2017. As a result of their data analysis on consumers, "more than 80% of credit card applications suggested by Credit Karma are approved, double the industry rate."
  • Consumers have a variety of options on the market when it comes to the financial guidance that each platform provides. On top of credit application recommendations, Credit Sesame offers consumers ways to save on fees and interest when making credit card or loan payments. Quizzle specifically provides recommendations for credit card and home loan applications.

From Part 02