Credit Rating Software Market

Credit Rating Software Market Outlook – 2030 

The global credit rating software market size was valued at $0.42 billion in 2020, and is projected to reach $1.92 billion by 2030, growing at a CAGR of 16.5% from 2021 to 2030. Credit rating involves validating credibility of individuals and companies based on their prior transactional and credit behavior. The credit rating software helps banks & financial service providers to precisely assess credit risks and take informed decisions in credit origination and loan monitoring. Credit ratings are issued by credit agencies and are used to assess risks associated with a government's or company's ability to meet its financial obligations. These scores are critical in determining quality of fixed-income securities. Credit rating software gathers and stores historical information about a customer's deals and transactions to generate credit rates when necessary.

Increased need for more comprehensive open data, access to real-time data to be used in risk & credit scoring, and developing existing credit scoring models are some of the major trends in the credit rating software market during the pandemic situation.

The credit rating software helps in faster approval of loans for consumers and provides instant results about the credit score of a consumer. In addition, credit rating software reduces chances of bad debts for financial institutions and increased concern among consumers for maintaining good credit scores. However, low credit score makes it difficult for SMEs to avail loans from banks to purchase goods from domestic as well as international borders and lack of support to individuals to avail loans has become a major factor that limits the credit rating software market growth. 

On the contrary, developing economies offer significant opportunities for credit rating software companies as banks increasingly rely on these credit rating software to determine credit worthiness of consumers due to high chances of consumers turning bad debts for banks. Moreover, demand for loans such as personal loans, education loans, and other type of loans has increased in recent years and this trend is further expected to increase in the future, which is anticipated to provide a potential opportunity for the credit rating software market growth. 

The report focuses on growth prospects, restraints, and trends of the credit rating software market analysis. The study provides Porter’s five forces analysis to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the credit rating software market outlook.

Segment Overview

The credit rating software market is segmented on the basis of offering, deployment model, enterprise size, end user, and region. By offering, the credit rating software market is bifurcated into software and services. The services segment is further segregated into professional services and managed services. By deployment model, it is divided into on-premise and cloud. By enterprise size, it is bifurcated into large enterprises and small & medium-sized enterprises (SMEs). By end user, it is divided into banks, insurance companies, credit unions, savings & loan associations, and others Region-wise, it is analysed across North America, Europe, Asia-Pacific, and LAMEA.

Competitive Analysis

The credit rating software market analysis includes top companies operating in the market such as Abrigo, ACTICO GmbH, FICO, Fitch Ratings Inc., Loxon Solutions Zrt, Moody's Analytics Inc., Pegasystems Inc., SAP, Soft4Leasing, and Softlabs Technologies & Development Pvt. Ltd. These key players have adopted various strategies, such as product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations, to increase their market penetration and strengthen their foothold in the industry.

COVID-19 Impact Analysis

The COVID-19 pandemic has a positive impact on the credit rating software industry. Financial institutions had strict rules regarding granting of loans since many consumers had very less funds to pay back, increasing the chances of bed debts. Hence, credit rating software helped banks to thoroughly check consumer credit behavior before granting loans. Therefore, demand for credit rating software increased during the COVID-19 pandemic and had a positive impact on the market. 

Top Impacting Factors

Credit Rating Software Reduces Chances of Bad Debts For Financial Institutions 

Credit rating software reduces the risks involved in loan transaction such as default in payment by consumer after a loan is granted. Banks can choose their customers based on their credit score and thus, reduce chances of bad debts. In addition, with higher credit score, banks & non-banking financial companies (NBFCs) get more confident that consumers can repay the loans. Most credit scores range between 600 and 750. Various lenders such as NBFCs & banks provide loans and credit cards based on credit score. Therefore, credit rating software helps financial institutions reduce the bad debts and increase profitability.

Increase in Concern Among Consumers to Maintain Good Credit Score

Credit rating software facilitates growth of loan approvals for banks and consumers based on their credit score. With the help of credit rating software, consumers have become more aware about advantages of a good credit score, since it helps them to get loans of big amounts and these credit scores can be improved by timely payment of loans. Moreover, having a good credit score has numerous advantages such as consumers can avail cheaper interest rates on loans, credit cards with better benefits & rewards, avail pre-approved loans, get loans with longer tenure, quicker approval on credit applications, and others. Therefore, credit rating software helps banks as well as consumers to be more informed about their credit score and its importance for getting a loan. Thus, this is a major driving factor for growth of the credit rating software market.  

Increase in Demand For Loans

Demand for loans such as personal loans, education loans, and other type of loans has increased in recent years and this trend is expected to further increase in the future. Moreover, importance of credit score has also increased as it is one of the major factors involved in getting a loan approved from banks. Banks need to check credit score of consumers before granting any loan, and if the credit score is low, then the loan is not approved by the bank since the chances of loan default increases. Therefore, with increasing demand for loans, demand for credit rating software has also increased. As a result, these are the major factors that provide lucrative opportunities for growth of the credit rating software market.  

Key Benefits For Stakeholders 

• The study provides in-depth analysis of the global credit rating software market share along with current trends and future estimations to illustrate the imminent investment pockets.
• Information about key drivers, restrains, and opportunities and their impact analysis on the global credit rating software market size are provided in the report.
• Porter’s five forces analysis illustrates the potency of buyers and suppliers operating in the credit rating software market.
• An extensive analysis of the key segments of the industry helps to understand the credit rating software market trends.
• The quantitative analysis of the global credit rating software market forecast from 2021 to 2030 is provided to determine the market potential. 

Credit Rating Software Market Key Segments

By Offering

• Software
• Services
• Professional Services
• Managed Services

By Deployment Model

• On-premise
• Cloud

By Enterprise Size

• Large Enterprises
• Small & Medium-Sized Enterprises (SMEs)

By End User

• Banks
• Insurance Companies
• Credit Unions
• Savings & Loan Associations
• Others

By Region

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Russia
  • Rest of Europe 
• Asia-Pacific 
  • China
  • Japan
  • India
  • South-East Asia
  • Rest of Asia-Pacific   
• LAMEA
  • Latin America 
  • Middle East
  • Africa

Key Market Players

• Abrigo
• ACTICO GmbH
• FICO
• Fitch Ratings Inc.
• Loxon Solutions Zrt
• Moody's Analytics Inc.
• Pegasystems Inc.
• SAP
• Soft4Leasing
• Softlabs Technologies & Development Pvt. Ltd.

 Credit Rating Software Market Report Highlights