Credit Reporting & Collections Services

Competitive Landscape

Demand for credit reporting and for collections services are driven by the volume of financial transactions, and by the health of the economy. The profitability of individual companies depends largely on efficiency of operations. The profitability of collections companies that buy receivables portfolios depends on their ability to assess recovery potential. Large credit reporting companies have significant economies of scale in operations. Small companies can compete successfully in the collections segment, where customer service and personal contact are important. Credit reporting is capital-intensive: average annual revenue per employee is about $400,000; credit collection is labor-intensive: average annual revenue per employee is about $85,000.