Your Equifax business credit report provides a snapshot of how well your company is doing financially. Potential lenders may decide to pull your report to determine your creditworthiness for a loan. If your business is not doing well financially and shows a low Equifax business credit score, a lender or supplier may decide it’s not worth it to do business with you.
By getting your copy of your Equifax business credit report, you can be proactive about protecting the financial health of your business and you can address any potential concerns in advance.
To learn more about your own small business’s credit history, here are 7 things to look for in your Equifax credit report along with information about how your report is created by Equifax and used by people who request a copy.
7 Equifax Business Credit Report Components
Your Equifax business credit report generally contains the following information:
- Company Profile: Basic information and data such as how to contact your business and your company name.
- Credit Summary: A quick overview of the financial health of your business and the standing of your credit accounts and accounts with suppliers.
- Public Records: Information available publicly, such as any judgments, liens, registration info from the Secretary of State and other records.
- Payment Trend and Payment Index: A chart showing the past year of payments along with a comparison to what’s typical for your industry.
- Additional Company Information: Other business owners, key data on close associates and more.
- Equifax Business Credit Risk Score: This score is designed to predict how likely your business is to go delinquent during the next year.
- Business Failure Score: This score predicts your business’s likelihood of failing and having to file for bankruptcy within the next year.
Other information may be included on your report, too, depending on how you do business and the suppliers, lenders, associates and partners your company has. The report serves to provide a detailed analysis of your business finances—as such, various information may be needed if it’s relevant to your business credit.
Prospective lenders, suppliers, partners and others with an interest in how well your business is doing may request a copy of your credit report before doing business with you. This helps them protect their interests and evaluate your creditworthiness.
It’s distinct from your personal credit history and personal credit score. This credit report only accounts for your company’s experiences using credit and working with suppliers. As such, it may look significantly different from your personal report. Good personal credit won’t necessarily mean your business credit is good, for instance.
How Equifax Generates Your Business Credit Report
Using third-party sources such as lenders and government reports, Equifax gathers together information on your business and presents it in a single, collected credit report. Information and data are entered into Equifax’s databases using computer automation and manual verification. From there, millions of new records join Equifax’s data every day.
Your report is a combination of data gathered through these sources and public information. Your business credit report brings this credit history all in one place so you can see what potential lenders and business partners would see in your credit background.
What’s a Good Equifax Business Credit Score?
The higher your credit score is, the better. Technically you have two credit scores with Equifax. The first, your Equifax Business Credit Score, reflects the risk you pose to lenders. The second, your Equifax Business Failure Risk Score, shows your company’s risk of bankruptcy within the next year.
Your credit score can range from 101 – 992. If you have a bankruptcy in your business credit history, your credit score will show a 0. Along with this score, your report provides up to 4 reason codes supporting the score Equifax gave you.
The Business Failure Risk Score can range from 1,000 – 8,000, although it will report a 0 if you have a bankruptcy on file.
How to Get a Copy of Your Equifax Small Business Credit Report
Getting a copy of your report is easy. You can obtain a copy of your small business credit report directly from Equifax for a nominal fee. Each time you view your report, you’ll have to pay separately or buy a multi-pack of several credit reports.
You can request a report online and access it through your online account with Equifax.
Why Your Small Business Needs an Equifax Business Credit Report
Monitoring your small business credit can have a variety of benefits. The ability to check your small business credit history is something that can help your organization identify weak areas, find growth opportunities and begin taking steps to strengthen the financial health of your company.
If you’re looking for a business loan, a credit report can show you reasons lenders may deny your applications. It can also highlight potential disadvantages to particular loans. With the report in your hands, you can make positive changes if you’re not eligible for a loan now but will need one to grow your business in the future.
You can also use a business credit report from Equifax to help you make other decisions about your business in response to your market. With all your financial health put into perspective and with Equifax’s expert analysis, you can make decisive choices about your business and change direction if you need to.
Using Other Equifax Business Credit Reports
Equifax also offers other types of reports and business credit reports on other companies. Using other Equifax services, you can obtain information to help your business and provide you with strategically-advantageous information.
You may use business credit reports on companies you partner with or pull a credit report on a competitor, for instance. If your business model relies on working closely with organizations who may be financially risky, it might make sense to use Equifax reports on other companies.
What You Shouldn’t Do With Your Equifax Small Business Credit Report
There are a few things you shouldn’t use your report for.
- For example, it’s a bad idea to ignore your credit report or leave it out in the open.
- If you find errors, don’t just assume Equifax will know immediately. Notify Equifax that you’ve found errors in your report so they can make corrections.
- Don’t get lazy with payments or begin making mistakes, even if you find out your credit scores are strong and your credit history is solid. Do protect your credit history any way you can.
- Don’t allow your business credit to suffer from a bad personal credit history, and vice versa. Keep your personal and business finances separate—this makes filing taxes easier and helps lenders and others see the distinction between your credit histories. (Here’s how to open a business bank account.)
Get Your Equifax Business Report
By requesting an Equifax business credit score, you demonstrate that you’re interested in keeping your credit in good shape. It’s easy to get your report and begin making strategic changes.
Once you do start using your report, don’t forget to recheck it periodically for updates. Since Equifax is always recording vendor payments, loans, supplier activities and other actions, your report and your scores are subject to change. Your report tells you what others are seeing when they pull your credit report—that’s information that can make a huge difference to your business.