Equifax Business Credit Reports Explained
Just like you have multiple personal credit scores, your business has multiple business credit scores. You may already be familiar with Equifax — it’s one of the primary credit bureaus that report personal credit. But Equifax also offers business credit scores and credit reports. As a small business owner, it is important to establish and build your business credit . Your business credit may be evaluated by lenders, partners and even vendors when making critical business decisions and evaluating the trustworthiness of your business. If a business has a history of making late or missed payments, this could indicate similar behavior from the business in the future. Poor marks on a business credit report could prevent you from getting a loan or cause a potential business partner to go in another direction. That said, positive marks on your business credit report could open up new opportunities for your business. Keep reading to learn more about Equifax business credit reports, how they work and if you should pay to see yours.
What Is a Business Credit Score and Credit Report?
Similar to personal credit, business credit is a numerical way of assessing a business’s financial responsibility. It can be used by lenders, creditors, business partners, vendors and others to determine if they want to extend a loan or simply work with a certain business. It is particularly useful for creditors and lenders who can assess risk and determine if your business should be approved or rejected for a loan or other form of credit. You have multiple business credit scores issued by the major business credit bureaus:
- Dun & Bradstreet
- Equifax
- Experian
- FICO SBSS
Each credit bureau may use a different scoring model so it may be useful to review all your business credit reports annually to spot any differences among them and any errors that could be corrected. A business credit report is a detailed look into your business’s credit history. Unlike a credit score, a credit report goes into the details of why a score is what it is. Business credit scores and reports are interconnected, but reports are important if you want to get a holistic view of your business’s credit history. The Complete Guide: How to Build Business Credit
What Is an Equifax Business Credit Report?
Each credit bureau structures credit reports differently. When you review an Equifax business credit report , you can find information about the business, such as:
Company Profile
This includes key business information like your company name, address and contact information including phone numbers. If you are using a DBA , additional business names should also be listed in this area. Additionally, the name(s) of the business owner(s), number of employees and other related information may also be included.
Credit Summary
Your credit summary gives the reader an overview of your business credit accounts with financial institutions such as banks or credit unions, suppliers and other types of service providers.
Public Records
Your business has a number of public records that are available such as your business registration with your local Secretary of State, liens, judgments and any bankruptcies associated with the business. This is all included in your Equifax business credit report.
Payment Trend and Payment Index
This shows a 12-month history of payment trends and juxtaposes it with an industry norm so the reader can compare.
Additional Company Information
This section may list alternative business names, names of owners and guarantors and more miscellaneous information like comments from prior credit grantors.
Payment History
The backbone of any good credit report is payment history. It shows a history of on-time, late and missed payments. It also shows how many days it takes your business to pay back its debts. This information can be the deciding factor when potential partners or lenders are considering working with your business or extending a loan.
Equifax Credit Scoring Models
One way in which business scores differ from its personal counterpart is the scoring model. You may be used to seeing your personal credit expressed as a figure between 300 and 850. Your business credit scores are very different and vary from one credit bureau to another. You’ll find two business credit scores on your Equifax business credit report:
- Equifax Business Credit Risk Score: According to Equifax , “Business Credit Risk Score predicts the likelihood of a business incurring a 90 days severe delinquency or charge-off over the next 12 months. The score ranges from 101 - 992 with a lower score indicating on higher risk.” The business credit score is meant to predict the changes that your business may incur severe delinquency or a charge-off in the next year. The score ranges from 101 on the low end and 992 on the high end, with a lower score indicating increased risk.
- Equifax Business Failure Score: “Business Failure Score predicts the likelihood of a business failing through either formal or informal bankruptcy over the next 12 months. The score ranges from 1000 - 1610 with a lower score indicating higher risk,” according to Equifax. The business failure score is meant to predict the likelihood that your business could fail, meaning bankruptcy , formal or informal, over the next year. The score ranges from 1000 on the low end to 1610 on the high end, with a low score indicating more risk.
Each score provides a deeper understanding of how risky your business is and its likelihood to fail. Anyone can view your business credit score so this information can directly impact how lenders, partners, vendors and others view you and your business. See: How to Get a Business Loan
How to Get an Equifax Business Credit Report
You can get a business credit report from Equifax by visiting the Equifax website and purchasing a single report or a pack of credit reports. You can view a sample of an Equifax business credit report to get an idea of what you can expect to see.
Equifax Business Credit Report Pricing
Business credit reports aren’t free but it may be worth the money. Here’s a breakdown of the pricing:
- Single report: $99.95
- Five reports: $399.95
Up Next: How Long Does It Take to Get Business Credit?
Should You Get an Equifax Business Credit Report?
Credit reports of all kinds are extremely useful. That said, Equifax business credit reports aren’t free but it may be worth it. If your business finances operate responsibly, you likely are already aware of any late payments, liens or bankruptcies. That said, credit reports sometimes contain errors. By buying and reviewing your business credit reports on a regular basis, you can spot and make efforts to correct those errors. Additionally, you can look at your business through the eyes of a lender. This can give you additional insight into what your business can be doing better or differently. More From Seek
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