Credit Monitoring Analysis, Pt. 3

Part
01
of three
Part
01

Credit Monitoring Aggregators: TAM

Little preexisting statistics for the credit monitoring aggregators market in the U.S. exist in order to find an exact estimate for the total addressable market. However, we have found a number of statistics and insights that may shed light on the market reach for credit monitoring aggregators.

Market Size

  • According to IBIS World, the market size of the financial planning and advice industry is $57.8 billion in 2020.
  • According to IBIS World, the market size of the credit repair services industry is $2.8 billion in 2020.
  • In 2010, credit monitoring was reported to be a $650 million per year business.
  • According to a 2019 report from the Consumer Financial Protection Bureau, credit card balances were around $900 billion at the end of 2018.
  • According to the Consumer Financial Protection Bureau's report, around 169 million consumers had at least one credit card account in their name at the end of 2018.
  • Credit monitoring aggregators use advanced technologies to help their members increase their credit scores and better manage their debts, and about 60 percent of credit card consumers say they are trying to improve their credit score.
  • According to a 2018 report from the U.S. Department of the Treasury, consumer data aggregators serve more than 21 million customers in the U.S.
  • In 2018, about 312 million people in the U.S. had access to the internet.

Statistics Based on Sample Companies

  • Credit Karma has over 100 million members in the United States, the U.K., and Canada, with 37 million monthly active users.
  • Credit Karma had about $1 billion in unaudited revenue in 2019.
  • Credit Karma's users include a third of all Americans who have a credit profile and half of all U.S. millennials.
  • Credit Sesame's funding investments totaled $110 million as of 2019.
  • Between 2015 and 2019, Credit Sesame's revenue and transactions have grown at an average of 90 percent compounded annual growth rate.
  • According to Similar Web, between September 2019 and February 2020, WalletHub had 3.82 million page visits on its website, with almost 92 percent of its traffic from the U.S.
  • According to founder Greg Powel, Consumers Advocate has served over 20 million consumers.
  • According to co-founder of Money Crashers Andrew Schrage, the site has 800,000 monthly readers.

Future Growth/Decline

  • The market size of the credit repair services industry is expected to decline -7 percent in 2020.
  • According to IBIS World, the credit repair services industry "largely performs countercyclical to the overarching business cycle; therefore, the currently favorable economic environment, characterized by rising disposable income and low unemployment, has proved unfavorable for the industry."
  • It is unclear how the likely recession caused by the current COVID-19 pandemic will affect the decline or growth of the credit monitoring aggregators market.
  • According to the U.S. Treasury Department report, there were $117 billion in cumulative global financial technology investments from 2010 to 2017, half of these from U.S. firms.

Research Strategy

To find information directly related to the total addressable market size of credit monitoring aggregators, we researched examples of specific platforms and marketplaces where consumers look for credit monitoring and credit repair information/services, news articles about these aggregators, and their company websites. When information specifically about credit monitoring aggregators was unavailable, we researched the credit repair services industry and financial data aggregators. We were able to conclude that the users of credit monitoring aggregators would have access to the internet and would fall under the general target demographics of those who own at least one credit card. Through data obtained about sample credit monitoring aggregator companies, one may conclude that more millennials use credit monitoring aggregators such as Credit Karma than other generations.

However, the data necessary—including the total industry revenue, the calculated annual growth rate, and exact usage rates—to calculate the total addressable market for credit monitoring aggregators in the U.S.
does not seem to be publicly available, likely due to the niche nature of this industry within the wider context of the credit repair services and data aggregation industries.
Part
02
of three
Part
02

Top Credit Monitoring Aggregators, Pt. 1

The leading credit monitoring aggregator by far is Credit Karma, with Credit Sesame being a clear second choice. These conclusions were based on the availability of information regarding number of users, company valuations or acquisition prices, and total amount of money raised in funding. NextAdvisor was chosen as a third company due to its large acquisition price and positive reviews.

Credit Karma

Credit Sesame

NextAdvisor

Part
03
of three
Part
03

Top Credit Monitoring Aggregators, Pt. 2

The credit monitoring aggregators identified have been compared in the "Credit Monitoring" tab of the spreadsheet. Credit Karma and Credit Sesame offer free credit monitoring services but NextAdvisor connects users to paid services. Credit Karma has a very good reputation, especially among Millenials.

Credit Karma

  • Credit Karma offers free credit monitoring services and receives a commission from purchases made through its recommendations.
  • Although the credit monitoring platform has not witnessed any recent changes, the company has included a profitable savings option by partnering with MVB bank.

Credit Sesame

NextAdvisors

Research Strategy:

While most of the data requested for was easily obtainable, we had to get creative for a few of the companies. The funding history of NextAdvisor was not as elaborated because the company operates an M&A financing scheme. Therefore, we identified the most recent merger or acquisition. As, NextAdvisor connects users to several top credit monitoring platforms, there are different pricing offers from each of the platforms.

To find the new expansion plans for Credit Karma and NextAdvisor, we leveraged press releases and articles from various reputable databases. We discovered that, although Credit Karma has not made any new expansions in their credit monitoring platform, the company has made expansions in other areas. Since NextAdvisor only connects users to third-party credit monitoring platforms, no new initiatives have been taken on its credit monitoring rating service but different strategic initiatives have been taken by the different providers it recommends.

To determine the level of customer engagement on each platform, we looked for press releases, reviews and articles on customer perception and features offered on each platform. We also drew insights by analyzing each company's app on Google Play.
Sources
Sources

From Part 01
From Part 03