Equifax Business Credit Reports
What is an Equifax Business Credit Report?
You probably know Equifax is one of the three main consumer credit reporting agencies. But did you know they also offer small business credit reports and scores? If you’re a small business owner you’ll want to understand these reports as your creditors, suppliers or even business partners may use them to make decisions involving your business.
Your personal credit score is a reflection of your credit history with your mortgage, an auto loan, personal credit cards, and other personal debt. Your business credit report, shows potential creditors your business’ history with business debt, like a small business loan or line of credit, business credit cards, your trade relationships with your suppliers and vendors, and other business creditors.
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Here is some of the information included in Equifax commercial credit reports.
- Company data: Name, address, phone numbers, alternate business names (including DBA’s or “doing business as” names), SIC/ NAICS codes, owner and guarantor names. It may also include information such as annual sales and number of employees when available. Corporate family trees (which identify other related businesses), may be included as well.
- Credit data: Business loans or lines of credit from banks or credit unions, equipment leases, business credit cards and other credit accounts may be reported. Equifax is also a Small Business Financial Exchange (SBFE) Certified Vendor which means it is authorized to sell reports that contain data gathered through the SBFE. The SBFE is a nonprofit trade association that maintains the SBFE Data Warehouse, which compiles payment data for commercial bank loans and lines of credit, credit cards and leases and from participating lenders. Inquiries (aka “credit pulls”) will also be listed, however, Equifax does not take inquiries into account when calculating risk scores.
- Public record data: Information available through public records may include business registration information as well as business tax liens, judgments, UCC filings and bankruptcies.
- Payment Index: The credit report will list the number of days, on average, that the business pays its suppliers, based on information supplied to Equifax. Equifax also reports average “Days Beyond Terms” (DBT) and compares those to national and industry averages, when available. Days Beyond Terms is the most common way payment history is reported on business credit reports. It refers to the number of days past the due date the payment is made.
- Financial Data: General information about bank balances and returned checks, assets, real estate owned, inventory and sales, as available.
- Equifax ID: A unique identifying number will be assigned to the business.
Because Equifax also operates a consumer credit reporting agency, it is able to produce credit scores that include information about the owner’s personal credit along with commercial credit data about the business. (This is optional and available with some credit scores. Consumer data is governed by the Fair Credit Reporting Act, which limits access to those with a permissible purpose, such as an application for credit.)
Equifax Business Credit Scores
Equifax offers a variety of business credit scores that are used for credit and collection decisions, equipment leasing, etc.:
Equifax Delinquency Scores
Equifax creates several different business credit scores that are designed to predict how likely a business is to experience a severe delinquency, which means falling 91 days or more past due on an account, having an account charged off or filing for bankruptcy. With the exception of the Early Default Score, below, a higher score is better because it indicates less risk.
|Business Credit Risk Score||101-660||Risk of sever delinquency on any account within twelve months|
|Business Credit Risk Class||1 – 5 (risk categories)||Likelihood of severe delinquency on any account within next twelve months|
|Business Delinquency for Other||224-580||Likelihood of severe delinquency within 12 months for any creditor in other category|
|Business Delinquency Financial Score||101-750||Risk of severe delinquency on financial services accounts|
|Business Delinquency Risk Class||1 – 5 (risk categories)||Risk of severe delinquency on any account|
|Business Delinquency Financial Risk Class||1 – 5 (risk categories)||Risk of severe delinquency on financial services accounts|
|Early Default Score||0-100||Likelihood customer will not pay in first four months after account opened. Higher score = greater risk.|
The Business Credit Risk Score, Early Default Score, Business Delinquency Score and the Business Delinquency Financial Score include the option of using personal credit data and commercial credit data.
Equifax Failure Scores
Failure scores are designed to predict the likelihood of business failure in a 12-month period. Generally, higher scores are better because they indicate less risk. These include:
|Business Failure Score||100 – 1604 or 1000 – 1880||Likelihood a business will fail within 12-month period|
|Business Failure Risk Level||Red, yellow, or green code||Likelihood a business will fail within 12-month period|
|Business Failure Risk Rating||1 – 9||Likelihood a business will fail within 12-month period|
How Do I Get My Equifax Business Credit Report?
There are a couple of ways you can access your Equifax business credit reports. You can go directly to Equifax and request a credit report on your own business (you can also request credit reports on other businesses) for a fee. A single business credit report will cost $99.95 or you can purchase a credit report multi-pack (five for the price of four) for $399.95.
You can also view your Equifax business credit reports for free at Nav.
How Your Equifax Data Impacts Your Credit Limits
Equifax also offers scoring solutions that can help lenders determine credit limits. These include suggested credit limits for suppliers, credit card issuers, or those offering loans. Note Equifax does not set credit limits; these tools are designed to be used as guideline by lenders and other factors may determine the actual credit limit granted.
Finding and Correcting Errors on Equifax Business Credit Reports
Here are three steps to finding and correcting errors on your business credit reports:
- Request a report: Whether you go directly to Equifax or work with Nav, get a copy of your business credit report so you can see what information they have about your business. Because some of the information about your business comes from the public record, it’s not uncommon for there to be errors, omissions, or other incorrect information.
- Dispute inaccurate or incomplete information: If you find any information that needs to be corrected, you can file a dispute with Equifax for free. You’ll want to make sure you can verify the incorrect information before you file a dispute. Once you’ve submitted a dispute, Equifax will investigate and return with the results of the investigation within 30 days. If there is a verifiable error, Equifax will update your business credit report.
- Regularly monitor your business credit: Business owners who understand their business credit profile are 41% more likely to be approved when they apply for a business loan than those that don’t. It’s human nature to positively impact the metrics we pay the most attention to—that includes your business credit profile. Regularly monitoring (I don’t think monthly is too frequently) what is included in your business credit report will help you build a strong business profile that will help you access borrowed capital when you need it.
Business credit is one of the most misunderstood aspects of running a small business, but is an important part of building a healthy and thriving company.
This article was originally written on March 1, 2017 and updated on March 23, 2022.