Equifax’s business credit score is one of the most commonly used measures of creditworthiness, and it is considered to be a reliable indicator of how likely a borrower is to repay a loan. The scoring system that Equifax has in place factors in credit history, the amount of debt, the number of late payments, and more.
As a business owner, you will want to keep a close eye on your Equifax credit score because a good score will help you negotiate better terms if you are ever in need of a business loan. Take a look below as we dig deeper into Equifax, its importance, and how you can improve your Equifax credit score.
Equifax is a credit reporting agency that provides credit reports, credit scores, and other financial information. It is one of the largest credit reporting agencies in the United States, along with Experian and TransUnion.
Equifax was founded in 1899 and is headquartered in Atlanta, Georgia. The company collects data from creditors, banks, credit card companies, and retailers, and then sells this data to businesses and consumers. Businesses use this data to decide whether to lend to or insure potential clients or see their financial health to take out loans of their own.
Your credit score is one of the most important numbers in your financial life It can determine whether you qualify for a new credit card, loan, mortgage, apartment rental, and more. Not all credit scores are the same though. This guide will focus specifically on Equifax credit scores to help you understand what goes into calculating your score and how you can check and improve it over time
What is an Equifax Credit Score?
An Equifax credit score is a three-digit number calculated by Equifax, one of the three major credit bureaus, that lenders use to evaluate your creditworthiness. Equifax uses a proprietary scoring model to analyze information in your credit report and generate your credit score, which ranges from 300 to 900.
Higher Equifax credit scores indicate you are less of a risk to lenders and may qualify you for better loan terms. Scores below 660 are generally considered poor or fair while scores of 720 and above are excellent. Each lender has their own criteria though for what scores they deem acceptable.
What Impacts Your Equifax Credit Score?
Several factors determine your Equifax credit score, including:
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Payment history – Whether you pay your bills on time. Payment delinquencies hurt your score.
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Credit utilization – The amount you owe compared to your total credit limits Using more than 30% of your available credit can lower your score
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Credit history length – How long you’ve had credit A longer credit history helps your score
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New credit applications – Opening several new accounts in a short period can lower your score.
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Credit mix – Having different types of credit – revolving (credit cards) and installment (auto, mortgage loans). A healthy mix helps your score.
Payment history and utilization tend to be weighed most heavily in determining your Equifax score. Maxing out cards or missing payments signals risk to lenders. Keeping balances low and making on-time payments are key to maintaining a higher score.
How to Check Your Equifax Credit Score
You can check your score in a few ways:
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Order your free Equifax credit report annually at www.annualcreditreport.com. This provides your full report but not your score.
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Purchase your Equifax credit score and full report through myEquifax. You can buy one-time or monthly access to your latest score and report.
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Sign up for a free or paid Equifax credit monitoring product like Equifax CompleteTM Premier. This provides ongoing access to your Equifax credit scores and reports.
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Some banks and lenders also provide your Equifax credit score for free as an account benefit. Check with your financial institutions.
Checking your own score doesn’t hurt your credit. It allows you to monitor your credit health over time as you work to maintain or improve your number.
How to Improve Your Equifax Credit Score
Boosting your Equifax credit score takes time and consistency. Here are some proven ways to start improving your credit number:
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Pay all bills on time – Set up auto-pay or payment reminders to avoid missed payments. Even one late payment can significantly hurt your score.
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Keep credit card balances low – Ideally under 30% of your limit. Pay down balances rather than moving debt between cards.
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Limit new credit applications – Too many hard inquiries in a short period can lower your score temporarily. Only apply for credit you need.
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Check your credit report – Dispute any errors with Equifax that could be weighing down your score. Stay vigilant for fraud.
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Consider credit mix – Having credit cards, a car loan, mortgage, etc can help demonstrate you can manage diverse credit types.
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Let your credit history age – Avoid closing old, paid off accounts. The longer your history, the better.
Be patient and persistent. As you demonstrate responsible credit management, your Equifax score should start to benefit over time. Monitor your score monthly and continue strengthening your credit profile.
The Takeaway
Your Equifax credit score summarizes your creditworthiness based on your credit history. The higher your score, the lower lending risk you pose. Scores above 720 are considered excellent while fair or poor scores below 660 may make qualifying for affordable credit more challenging. Check your Equifax score frequently and focus on positive credit behaviors – like paying on time and lowering balances – to maintain and continue improving your number long-term. Know your credit score and take control of your financial reputation.
What Factors Affect an Equifax Business Credit Report?
There are 4 factors that can affect an Equifax business credit report. Let’s take a look at each one and break down how they affect your credit report.
- Public Record. Your public record includes rulings against your business such as credit lien, bankruptcies, etc. Usually, these types of rulings may have a negative impact on your credit score.
- Credit History. Equifax takes into consideration your credit history and credit inquiries. Typically, an older credit account is a good sign and an extensive list of credit inquiries will show as a red flag.
- Payment Trends. Equifax checks the last 2 years to see if you are making payments or if there are any delinquencies. Paying back debt in a timely manner shows positively on your credit report.
- Firmographics: Firmographic data includes information about your business, like company size, industry, sales/revenue, location, growth, and business framework.
Importance of the Equifax Business Credit Score
Depending on your financial requirements, your Equifax business credit score can be incredibly influential. Businesses with higher scores are more likely to be approved for loans and lines of credit. They also tend to receive lower interest rates and better terms. In short, the Equifax business credit score is an important tool for businesses of all sizes.
What is Equifax Credit Score? (How to Check and Boost Your Equifax Score)
FAQ
What is a good Equifax score?
580-669: Fair. 670-739: Good. 740-799: Very good. 800-850: Excellent.
What is Equifax in credit score?
The Equifax credit score is an educational credit score developed by Equifax. Equifax credit scores are provided to consumers for their own use to help them estimate their general credit position. Equifax credit scores are not used by lenders and creditors to assess consumers’ creditworthiness.
What is the difference between Equifax and TransUnion?
One of the most evident differences between these two bureaus is that Equifax scores range from 280 to 850, but TransUnion scores range from 300 to 850. Regarding credit reports, Equifax includes 81 months of credit history, whereas TransUnion includes 84 months.
What does Equifax tell you?
Your credit reports include information about the types of credit accounts you’ve had, your payment history and certain other information such as your credit limits.