Equifax plays a critical role in determining the amount of business credit and funding entrepreneurs can access. That’s why monitoring and building your Equifax credit profile is so important.
In this comprehensive 2000+ word guide, we’ll break down exactly how your Equifax report is used by top banks when making lending decisions. You’ll also discover insider tips to strengthen your credit score plus the top 5 business credit cards that pull Equifax reports in 2023.
Let’s dive in!
Business Credit vs Personal Credit – What’s the Difference?
Before jumping into the Equifax report itself, it helps to level-set on key differences between personal and business credit:
Data Factored Into Scores – Personal credit scoring models like FICO primarily consider consumer payment history, amounts owed, credit history length and mix of credit types. Business scores incorporate more data like business type, industry failure rates and commercial payment habits.
Tradelines Impacted – Personal credit accounts for non-business loans, mortgages, credit cards, etc in your own name. Business credit covers company payment history across vendor trade accounts, credit cards, financing, etc.
Bureau Reporting – As a consumer you likely recognize names like Experian, Equifax and Transunion for personal credit data. Business tradelines get reported to D&B and LexisNexis with Equifax playing a major role especially among online lenders.
Score Scale Differences – Personal FICO spans 300-850 while business failure risk runs from 0-100. Understanding these distinct scoring models is crucial when assessing your overall financial health.
Interrelated Not Interchangeable – Personal and business credit impact one another. As an individual you legally back small companies so your consumer scores determine approvals until significant commercial history gets established.
You need both aligned not just one or the other!
Now that we’ve covered the key differences, let’s explore specifically how Equifax compiles important business credit data into reports and scores that banks analyze to make informed lending decisions.
What is Equifax and How Do Banks Use It?
Equifax is one of the three major consumer credit reporting bureaus along with Experian and Transunion. However, unlike the other two, Equifax also developed robust commercial credit reporting capabilities making them a trusted data leader used by over 88% of commercial lenders!
The company collects financial data on both individuals and businesses which it aggregates into detailed credit reports.
These reports include several key components that banks analyze to determine your business’ creditworthiness:
Business Failure Risk Score: Proprietary score from 0-100 estimating the likelihood your company goes bankrupt. Lower scores are better – 75% of approved applicants have scores below 80!
Business Payment Index: Measures your payment habits on lines of credit last reported to Equifax. Over 100 is exceptional while 80% have scores above 80.
Public Records/Collections: Negative public records like bankruptcies, tax liens, lawsuits and more. Too many severely impacts funding eligibility so aim for none!
Credit Score: Your personal credit score if you’re a sole prop or small partnership. Varies based on the model used but a good benchmark is above 670.
Inquiries: List of every entity that accessed your Equifax report data. Too many inquiries (6-8 annually) looks suspicious so restrict applications.
Tradelines: All accounts where you have borrowing and payment history. Includes credit cards, loans, mortgages, etc.
In most cases, banks want to see a business failure risk score below 80, a business payment index over 80, no public records, a personal score above 670, fewer than 8 inquiries annually, and solid tradelines with on-time payments.
Achieving these precise numerical benchmarks indicates your business is at lower risk of defaulting on new debt obligations. As a result, banks feel more comfortable extending higher amounts of low-cost capital.
Why Your Equifax Score Matters
You might be wondering why you should care specifically about your Equifax credit data versus the other bureaus.
It’s true that many lenders check multiple reports from all three agencies when evaluating an application. However, there are exceptions.
According to Nav CEO Greg Ott, “a good number of business lenders only pull one credit report…Equifax tends to be the report of choice for online lenders.”
This means your Equifax business credit profile takes on added importance when seeking financing from prominent online sources such as Kabbage, OnDeck Capital and Square Capital.
Beyond that, monitoring just one report is more feasible for time-constrained entrepreneurs. Actively managing your Equifax score provides outsized impact relative to the effort required.
Now let’s examine the top 5 business credit cards for 2023 that specifically utilize Equifax data during the underwriting process.
Top Business Credit Cards Based on Equifax
1. Brex Corporate Card
The Brex Corporate Card offers a rare trifecta of high rewards, no personal guarantee, and reporting to business credit bureaus.
Cardholders earn 7x points on rideshare along with 4x on restaurants and travel. Brex points can then be redeemed for cash back or transfers to airline/hotel partners. There are no foreign transaction fees.
Brex approves applicants based on business performance rather than personal credit scores. So you won’t have to personally vouch for charges which is a major plus.
The card does report payment history to Equifax including your credit limit, account age and balance. This helps construct positive business credit especially for younger companies.
Other Key Features:
- No annual fee
- Up to 60 days interest-free on purchases
- Integrates with popular accounting software
2. Ink Business Unlimited
With fantastic sign-up perks plus no annual fee, the Ink Business Unlimited makes it easy to rack up serious rewards. New cardholders earn $750 bonus cash back after spending $7,500 within 3 months from account opening.
You’ll achieve unlimited 1.5% cash back on every purchase. There are also built-in protections for things like cell phone insurance and extended manufacturer’s warranties. No wonder it’s one of the most popular small business credit cards.
This card helps build your business credit profile as activity gets reported to Dun & Bradstreet in addition to Equifax. Approval decisions factor in both personal and business credit scores.
Other Key Features:
- 0% APR for 12 months
- No category restrictions on earning cash back
- Chase travel transfer partners
3. Wells Fargo Business Platinum
For fixed-rate reliability across all purchases, it’s hard to beat the Wells Fargo Business Platinum card. You’ll receive a generous 1.5% cash back with no rotating categories or limits.
New cardholders can earn $500 cash rewards after spending $5k within 120 days of account opening. There’s also an intro 0% APR offer for 12 months on purchases and qualifying balances transfers.
Wells Fargo issues credit based primarily on your personal credit so even newer businesses can qualify. At the same time, it promotes responsible spending with a preset credit cap that grows alongside your company.
The card furnishes payment information to all three credit bureaus including Equifax. Timely settlements boost your business credit profile across the board.
Other Key Features:
- No annual fee
- Cell phone protection
- Extended warranty protection
- Rental car insurance
4. Barclays Business MileUp
If chasing rewards points gets you excited, take a closer look at Barclays Business MileUp card. You’ll rack up a whopping four points per $1 spent on hotels/ground transportation and unlimited 1.5x miles on other purchases.
Within 90 days, cardholders receive 35,000 bonus miles which can be redeemed for $350 cash back. Qualified accounts also get $100 after spending $500 or more.
Barclays offers this card even to applicants having just decent personal credit so there’s no need to submit tax documents. Pre-approvals are available as well. It reports to Equifax and all major bureaus.
Other Key Features:
- No annual fee
- 0% Intro APR for 12 months
5. Fundbox Credit Line
Technically not a credit card but still an excellent revolving credit facility. Fundbox provides flexible lines up to $150,000 exclusively for companies to tap on-demand. Once approved, you access funds directly from your secure Fundbox dashboard as needed.
You only pay interest on the amount drawn down rather than the entire credit limit. There are no application, origination, or maintenance fees to eat into your bottom line. Making timely repayments helps builds business credit through Equifax.
Because Fundbox utilizes more than just traditional FICO data for approvals, they greenlight entrepreneurs even with poor personal credit. The focus lands squarely on making consistent sales tied to outstanding invoices.
Other Key Features:
- No prepayment penalties
- Boost cash flow
- Draw funds anytime
Now that you know the key business credit cards relying on Equifax data, let’s explore concrete ways to build and strengthen your profile.
10 Steps to Build Strong Equifax Business Credit
Ready to get laser focused on improving that all-important Equifax report? Follow this comprehensive 10-step blueprint:
Step 1 Obtain Your Report
Visit annualcreditreport.com for your free yearly reports from the major bureaus including Equifax. Monitoring services like Nav also provide unlimited access.
Step 2 Review All Details
Carefully analyze your report data for errors – incorrect personal info, suspicious inquiries or tradelines not belonging to your business.
Step 3 Dispute Any Inaccuracies
Finding mistakes is common but disputing them quickly limits damage. File dispute paperwork with Equifax ASAP.
Step 4 Pay Down Balances
Ideally keep individual and overall credit utilization below 30%. Shoot for paying off cards bi-weekly.
Step 5 Never Miss Due Dates
Even one late payment severely impacts scores! Set reminders for each account and enroll in autopay.
Step 6 Limit Hard Credit Inquiries
Each new application counts as an inquiry so only apply for needed credit. Cap at 6-8 annually across all bureaus.
Step 7 Build New Payment History
Open new revolving store accounts with vendors in your industry. Making on-time payments establishes positive tradelines.
Step 8 Become an Authorized User
Get added as an authorized user on a trusted business partner’s credit card account. Their good standing boosts your profile.
Step 9 Diversify Credit Mix
Open a business installment loan and make timely payments. Diverse healthy tradelines improve credit mix metrics.
Step 10 Monitor Regularly
Review Equifax each month ensuring strong payment history and low utilization as you continue strengthening your profile over time.
Committing to this regimented 10-step blueprint pays major dividends long run in the form of expanded business financing eligibility and affordable interest rates!
Now let’s tackle even more common questions from entrepreneurs building business credit:
Critical Business Credit Questions Answered
Strengthening your Equifax business credit profile enables higher approval chances plus more funding at lower rates. But you likely still have some lingering questions. Let’s tackle the key items:
How Can I Check All Three Credit Reports?
Annualcreditreport.com provides free yearly access to your Equifax, TransUnion and Experian credit files as mandated by law. Paid monitoring services like Nav offer unlimited reports from one unified dashboard.
What Credit Score Is Needed For Approval?
At least 670 FICO is recommended for most business credit cards assuming you don’t submit separate financial documents. However, some issuers like Brex approve based on business metrics alone ignoring personal scores.
Does Applying For New Credit Cards Hurt My Scores?
Yes – new applications require “hard inquiries” which temporarily lower scores. Limit hard inquires across all bureaus combined to maximum 6-8 annually.
How Many Tradelines Should My Business Have?
Shoot for at least three active tradelines reporting to Equifax. More is better to establish depth of healthy payment history. Over 12 diverse tradelines makes business credit “thick”.
How Do I Repair Bad Business Credit?
Review all reports for inaccuracies and file disputes promptly. Pay down balances below 30% of limits. Bring existing accounts current then make reliable on-time payments rebuilding your standing.
What Financing Options Beyond Credit Cards Exist?
Business loans, lines of credit, and alternative online lenders like Kabbage often rely heavily on Equifax data. Vendor trade credit for supplies also builds positive payment history that reports.
How Long Do Closed Accounts Impact My Credit?
Up to 10 years! Even after closure credit cards remain on your reports influencing scores positively or negatively based on that history.
What If I Have Bad Personal Credit?
Getting your personal finances in order should be top priority for new entrepreneurs before pursuing dedicated business credit since your personal reports determine approvals in the early stages.
Can I Rebuild Credit Quickly?
Fast business credit repair takes diligence not miracles! Limit hard inquires, pay down balances below 30%, bring existing accounts current, make on-time payments, constantly monitor your profile. Healthy scores follow over time not overnight.
Final Thoughts
I hope this guide served as a wake-up call regarding just how vital monitoring and developing your Equifax credit profile really is.
The precise risk rating factors and commercial payment metrics central to modern lending decisions make building robust business credit unavoidable for scaling companies.
While every entrepreneur’s situation differs based on industry, age and size of your venture, establishing a strong base payment history, keeping close tabs on all tradelines, and restricting loan applications makes business credit improvement attainable for anyone.
Combining a glowing Equifax commercial report with a top tier rewards-earning credit card gives your company the flexible access to capital needed to reach new heights!
The banks and offers listed above should provide the perfect starting point to pump up your credit limits and financing power over the long haul. Here‘s to prosperous new beginnings in 2023!