A Look at Equifax’s Commercial Credit Scores

Equifax’s main business credit scoring model is the Credit Risk Score. The idea behind this score to predict the probability of a business customer becoming seriously delinquent on supplier accounts. It also predicts if a business will become bankrupt. Both predictions are for within a 12-month period. It’s the most important of Equifax’s commercial credit scores.

Credit scores range from 1 to 100, with a lower score indicating a higher risk of serious delinquency.  By definition the score predicts the likelihood of a business incurring a 90-days severe delinquency or charge-off. So this is for over the next 12 months.

Details on Equifax’s Commercial Credit Scores

Scores of 90 and above express that obligation payments are coming in as agreed. While scores from 80 to 89 indicate payments are coming in 1 to 30 days overdue.

Scores of 60 to 79 represent payments are coming in 31 to 60 days past the agreed-upon due date. While credit scores between 40 to 59 indicate payments coming in 61 to 90 days overdue.

Scores between 20 to 39 mean obligations are coming in 91 to 120 days overdue. While scores between 1 to 19 mean obligations are being paid 120 or more days past the due date.

More of Equifax’s Commercial Credit Scores

Equifax also provides a business credit score for suppliers known as the Small Business Credit Risk Score for Suppliers. The idea behind this model to help credit grantors improve their risk assessment and reduce delinquency rates. So this is for while helping to improve profitability.

The score uses unique bank loans, lease information, and credit card data. And it also uses supplier, Telco and utility credit history, public records and firmographic data. All of this data comes from their own Equifax Commercial database.  The Small Business Credit Risk Score for Suppliers credit scores range from 101 to 816.

Another of Equifax’s Commercial Credit Scores

Equifax also offers a Business Failure Risk Score with many reports.  This Risk Score predicts the likelihood that the business will fail or file for bankruptcy within the next 12-month period. This model helps identify businesses that pose a greater risk for failure. This is so that suppliers and credit grantors can take appropriate actions.

2020 Update

On February 10, 2020, the Boston Globe reported that Attorney General William Barr and the United States Justice Department were charging four members of China’s military on suspicion of the 2017 hack into Equifax. The Attorney General noted there have been any number of data theft by the Chinese military in recent years. These thefts have been of sensitive information such as identifying American intelligence officers. One use of Equifax‘s financial data could be to find out if any intelligence officers have money issues – and would thereby be subject to bribery or blackmail. Stay tuned as we continue to follow this story.

These are the main business credit scores you will often see from Equifax. And now you know how they work and what they represent. Check out the video below for more information about Equifax’s commercial credit scores.