Key takeaways
- Equifax is one of the major business credit bureaus
- Business lenders usually look at both business and individual credit scores when reviewing an application and may request a copy of your business credit report from Equifax
- Some of the factors that Equifax considers when generating your risk scores are your interactions with credit both with trade suppliers and financial institutions, your payment history, banking information and more
Businesses, just like individuals, have credit reports and credit scores. When you apply for a business loan, lenders will examine your business and personal credit when making a lending decision. Lenders want to see that you have an extensive payment and credit history showing on-time payments and solid management of any credit you have received.
Equifax is one of the major credit bureaus that tracks business credit scores, and Equifax’s business credit report provides many details like outstanding debt balances and past bankruptcies that potential creditors may want to see. Understanding how business credit works can be key to ensuring you qualify for loans to help you grow your business.
What is an Equifax business credit report?
An Equifax business credit report is a document that outlines your company’s previous interactions with credit. Like a personal credit score, lenders can review it to determine whether a business is likely to pay its debts.
Equifax’s business credit reports contain the following information.
Company info
One of the first things that will show on the report is your business’s basic information, including its name and any alternate names it works under (DBAs). It also includes contact information, phone numbers, addresses, related businesses, number of employees and owner information.
In addition, the report will show the business’s Standard Industrial Classification (SIC) code and the North American Industry Classication System (NAICS) code. These codes help to identify your business to the requestor.
An additional section at the bottom also outlines the business’s entity type and registration, property owned, employee size and sales volume.
Score
The score summary gives the requestor a variety of scores surrounding the likelihood that you will pay a creditor as well as the risk of delinquency and business failure. The Payment Index will also give businesses an idea of when you typically pay your creditors and exactly when they can expect payment from you. These scores are calculated based on your business’s payment habits and industry risk.
The credit report includes a detailed look at the scores, including reasons behind granting that score to the business.
Report highlights and alerts
This section overviews your company’s financial and credit information, including the number of accounts you have open and the total outstanding balance. It will also highlight any major delinquencies, collections or judgments you have, giving requestors a window into how well you manage your current credit.
Associated businesses or guarantors
The principal/guarantors segment highlights any businesses associated with your company. It includes any businesses guaranteeing loans that your business has. This will include details about the business’s and business owner’s/guarantor’s name and the business address.
Industry trade and financial trade details
The Industry Trade Information reports any trade credit that your business has open with industry suppliers. It will include the credit amount and total amount owed to the supplier.
The Financial Trade Information section includes a detailed list of accounts as reported by financial institutions. These institutions will report activity on your credit or deposit accounts, including outstanding balances, credit limit, balances past due, actual payments and overdrafts.
The institutions reporting include business loans or lines of credit, leases, and credit cards.
Payment thread
This section of the report shows your company’s payment history. It looks at your payments on outstanding debt and your payments to creditors and suppliers who have submitted invoices. It looks at your total outstanding debt across previous quarters, showing the trend in how you pay down your debts.
Returned checks
This section will include details about checks that were returned due to unavailable funds. It will include the date of the check, check amount and bank information where the check originated.
Collections and legal details
Collections will show the third party collection agency’s name, the amount that went into collections status, the amount paid and the status of the account, such as whether it was paid or abandoned.
The legal details section will supply information on any judgments or legal suits that another person or organization has made against the business.
Information from the Superintendent of Bankruptcy
This section outlines any details about bankruptcies that your business has filed. It will include the court where you filed bankruptcy, the receiver and the trustee assigned to the case. This information will remain on file for five years.
Bank information
Equifax will periodically request information from banks about your accounts, the type of account (checking, savings or loan) and the amounts in each account. It will share this information with anyone who requests a credit report.
Liens detail
This section will give information about any loans in which your business has put up collateral to back the loan. It will include the amount of the loan as well as details about the asset being used, such as its VIN.
Why you would want an Equifax business credit report?
When you apply for a business loan, lenders will look at your business credit report. Before they do, you should request a copy of your own credit report, such as an Equifax business credit report.
There are a few good reasons to request your credit report, including:
- Correcting errors on your report. Credit bureaus aren’t perfect, and they might have inaccurate or outdated information on your report. If that information is negative, you can get it removed, which can boost your score.
- Learn how to improve your credit. Looking at your business credit report also helps you identify what you can do to improve your business credit score. For example, if you see that you have little-to-no credit data, getting a business credit card could help you start showing a history of good interactions with credit.
- Understand the payment history of a new customer. You can also request a business credit report on other companies. This can be a good idea when working with a new customer. If that customer has strong credit, you can feel more comfortable about extending credit. If they have poor credit, you might demand immediate payment instead.
- Finding out credit information on a business you’re acquiring. You want to be prepared when purchasing a business. Getting a credit report can help you understand where the business stands financially and whether or not it’s even a good investment.
Factors that impact an Equifax business credit report
Four factors determine your Equifax business credit score:
- Credit history. This includes details about your total outstanding debts with various financial institutions and suppliers as well as your detailed payment history.
- Payment history and trends. Missing payments will hurt your credit while timely payments help. More recent activity is more impactful than older payments and having past-due balances will hurt your score.
- Public records. Negative information in public records, like active liens or recent bankruptcies, will damage your score.
- Risk scores. These scores shows your payment history and compares your business risk to others in your industry. These show when creditors can expect payment from you and whether you’re a risk for delinquencies or business failure.
- Firmographics. This considers your company’s size, age, and industry. Older and larger companies will tend to have higher scores. Equifax also compares you to similar businesses in your industry. So if most companies in your industry have high credit utilization, having high utilization will hurt you less than if most of your competitors had low utilization.
How to get an Equifax business credit report
To get an Equifax business credit report, you’ll need to purchase one from Equifax. The company currently isn’t very transparent about pricing. You’ll have to sign up for an account and speak to a sales representative to get information about pricing.
What to do if there is an error on your report
If there is an error on your business credit report, you can reach out to Equifax to dispute the error. You can do so by contacting Equifax, signing in to your online account and disputing the error.
Make sure to have some documentation ready to prove the information is inaccurate.
Alternatives to Equifax business credit report
Equifax is one of the three major business credit bureaus. If you don’t think Equifax’s credit reports are right for your needs, you can consider other options.
- Experian. Experian is another credit bureau that tracks both personal and business credit scores. It provides two scores on its business credit reports – a financial stability score and a business credit score.
- Dun & Bradstreet. This company only focuses on business credit and does not offer personal credit scoring. It generates a Paydex score from 1 to 100 that rates how promptly a company pays its bills. It also offers recommendations for the credit limit lenders should consider for a business.
Bottom line
Equifax business credit scores are useful for evaluating the risk of lending to a company. Take steps to boost your score before applying for loans so that you can get the best rates and terms available to you. You can also consider getting the credit report of companies you plan to do business with. That way you understand the potential risk of getting involved with a new customer or buying a new business.
Frequently asked questions
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Equifax does not publicly disclose the cost of a business credit report. You can contact the company’s sales team to get pricing information.
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Yes, business credit reports are public. Anyone can buy one from Equifax or another business credit agency. The report contains information about the company’s background, its owners, its subsidiaries, and financial data such as its credit scores, and liens or judgements against it, and its banking, collections and trade histories.
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Equifax has three scores on its business credit reports. The business credit score ranges from 101 to 992 and scores of about 550 or higher are generally considered good.
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