Published By Janet Gershen-Siegel at November 4, 2017
Equifax’s Risk Score is a product developed by this credit reporting agency to help businesses understand what it is they are getting into with businesses (and even individuals) when it comes to loaning money or extending credit. The concept behind it is to show the risk of a default within a set period of time.
Equifax’s Risk Score serves as an enhanced risk model intended to aid in predicting theprobability of a business becoming 90 or more days late within 24 calendar months.This report provides a rank-ordered risk perspective to try to supportmore informed credit decisions, help to minimize risk exposure and to increase portfolioprofitability. The idea is to strengthen a business across all portions of the life cycle of an accountwith comprehensive scoring tools backed by available Equifax business credit information.
The Equifax Risk Score is designed to deliver a multi-faceted business viewpoint based on factors such asdepth of credit information,length of credit history, and delinquency history.Five separate scorecards are broken down with a combination of statistical analysisand business requirements in order to create the most comprehensive business perspective the company can possibly provide. The Equifax Risk Score is meant to help pinpoint new marketing andcross-sell opportunities or to identify areas of risk exposure when it is combinedwith the Equifax Bankruptcy Navigator Index.
With the Equifax Risk Score, the company provides a predictive perspective in orderto assist in speeding up credit decisions while at the same time adding a layer of protection against risk at everypoint in the life cycle of the account. The Equifax Risk Score is meant to help businesses to increase their targeting precision, appreciate newexpansion opportunities, and streamlinetheir collections efforts and to mitigate their riskexposure with powerful scoring insights.
The key benefits are as follows:
The Equifax Credit Risk Score is the product of company research and records. It is driven by many of the same things which drive all business credit scores, namely:
Much like with all other credit scoring mechanisms, your small business will do best if you pay your debts on time and in full, as often as possible (100% of the time, if that is at all possible). You will also need to keep your overall credit utilization rate at 30% or less of your total available credit and try to avoid judgments, liens, and bankruptcies as well as you can.