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.
One of the most important numbers in your financial life is your credit score. It can tell you if you can get a new credit card, loan, mortgage, apartment rental, and more. Not all credit scores are the same though. This guide is all about Equifax credit scores and will help you understand how they are calculated and how to check them and make them better over time.
What is an Equifax Credit Score?
Equifax is one of the three major credit bureaus. It gives you a three-digit credit score that lenders use to decide if they want to lend you money. Equifax’s credit score, which is between 300 and 900, is based on an internal scoring model that looks at information in your credit report.
If your Equifax credit score is higher, lenders see you as less of a risk and may offer you better loan terms. Most of the time, scores below 660 are bad or average, while scores of 720 or higher are great. But each lender has their own rules about what scores are good enough.
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 is the difference between how much you owe and how much credit you have available. 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. Decisions made against your business, like credit liens, bankruptcies, and more, are in the public record. Most of the time, these kinds of decisions can hurt your credit score.
- Credit History. Equifax takes into consideration your credit history and credit inquiries. A credit account that is a few years old is usually a good sign, while a long list of credit inquiries is usually a bad sign.
- Payment Trends. Equifax looks back at the last two years to see if you’ve been making payments and if there are any late payments. Your credit report will reflect well if you pay back your debts on time.
- Firmographics: This type of data includes facts about your business, such as its size, type, location, sales, growth, and business structure.
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.