It is hardly a secret that credit bureaus have faced difficult conditions since central banks began hiking interest rates in 2022. Higher borrowing costs have put the brakes on demand for mortgages, personal loans and credit cards, which in turn has dampened demand for the credit checking services these companies provide to banks and other lenders.
Tip style
Growth
Risk rating
Medium
Timescale
Long Term
Bull points
- Resilient business despite soft credit conditions
- Organic growth and margins expected to move higher
- Cloud migration set to drive efficiencies
Bear points
- Greater competition in consumer markets
- Regulatory and security risks
- Steep valuation
As one of the ‘Big Three’ credit reporting agencies along with Equifax (US:EFX) and TransUnion (US:TRU), Experian (EXPN) should have been hit by higher interest rates causing a slowdown in lending – that is if you still think of it as an old-school credit bureau. But this FTSE 100 heavyweight has long outgrown that label, reinventing itself as a fully-fledged data and analytics platform.