Credit Scoring Market Forecast and Growth 2031

The Credit Scoring market is expected to register a CAGR of 22.9% in 2023–2031. Open banking and consumer-centric credit scoring are likely to remain key credit scoring market trends.

Credit Scoring Market Analysis

In the complex world of finance, the notion of credit scoring is critical in establishing an individual's or a business' creditworthiness. As financial institutions rely more on data-driven evaluations to make lending choices, understanding the subtleties of credit scoring is critical for both borrowers and lenders.

Credit Scoring Market Overview

Credit scoring is a systematic and statistical process used by financial organizations to determine the creditworthiness of individuals or businesses applying for financial goods such as loans or credit cards. It entails assessing a variety of indicators, including an individual's or company's credit history, payment behavior, outstanding obligations, and financial soundness. Credit scoring aims to evaluate the level of risk involved with giving credit to a certain borrower.

REGIONAL FRAMEWORK

Credit Scoring Market Drivers and Opportunities

Technological Advancements to Favor Market

AI-based credit scoring is a new way of determining an individual's creditworthiness that makes use of artificial intelligence (AI) and machine learning (ML) technology.  Rather than relying simply on traditional credit rating methods such as a study of credit history, income, and current obligations, AI-based credit score takes into account a broader range of data sources, including digital footprints. The use of AI in credit scoring also allows for the assessment of creditworthiness of individuals who do not have a traditional credit history but leave other types of data footprints that can be analyzed, such as online transactions, social media interactions, browsing behaviors, or mobile app usage. This is driving the market growth.

Alternative Data – An Opportunity in Credit Scoring

Alternative credit data is financial information that is not normally reported to the three major credit reporting agencies (Transunion, Equifax, and Experian), which lenders might use to determine whether to extend credit or make a loan. Most loan applications rely primarily on data from these agencies, which are given in handy credit score and credit report formats. Banks can increase the pool of potential borrowers in underserved areas by using alternative data sources and non-traditional information to create comprehensive customer profiles. For instance, Yabx's methodology has proven particularly successful in Africa, with its work in Uganda increasing the qualified customer base from 100,000 to an incredible four million and more than six million loans disbursed in just 12 months.

Credit Scoring Market Report Segmentation Analysis

Key segments that contributed to the derivation of the Credit Scoring market analysis are type and application.

• Based on application, the Credit Scoring market is divided into consumer credit scoring, business credit scoring, alternative credit scoring, and others. The consumer credit scoring pricing model segment held the largest share of the market in 2023.
• By type, the market is segmented into credit score, credit report, and credit check. The credit score segment held the largest share of the market in 2023.

Credit Scoring Market Share Analysis by Geography

The geographic scope of the Credit Scoring Market report is mainly divided into five regions: North America, Asia Pacific, Europe, Middle East & Africa, and South America/South & Central America.

North America has dominated the Credit Scoring market. Technological advancements in North America countries are driving the demand for Credit Scoring in the region. The Credit Scoring market is undergoing substantial development in North America, which can be attributed to the rise of consumer credit growth.  

MARKET PLAYERS

Credit Scoring Market Report Scope

Credit Scoring Market News and Recent Developments

The Credit Scoring market is evaluated by gathering qualitative and quantitative data post post-primary and secondary research, which includes important corporate publications, association data, and databases. The following is a list of developments in the market for Credit Scoring and strategies:

• Equifax's OneScore for Commercial credit score has helped to increase credit opportunities for small enterprises. This new commercial credit score, powered by the Equifax Cloud™, connects financial data from over 33 million businesses with credit information on the business principal. This helped start-ups and small businesses better demonstrate their creditworthiness when seeking capital to grow operations or address headwinds in an uncertain economic environment. (Source: Equifax, Press Release, 2023)

Credit Scoring Market Report Coverage and Deliverables

The “Credit Scoring Market Size and Forecast (2021–2031)” report provides a detailed analysis of the market covering below areas:

• Market size and forecast at global, regional, and country levels for all the key market segments covered under the scope
• Market dynamics such as drivers, restraints, and key opportunities
• Key future trends
• Detailed PEST/Porter’s Five Forces and SWOT analysis
• Global and regional market analysis covering key market trends, major players, regulations, and recent market developments
• Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments
• Detailed company profiles