Businesses seeking capital for growth can now benefit from enhanced Equifax data sets, which include financial, non-financial, and business owner credit history. This can be leveraged by commercial lenders to provide better access to capital using the new commercial credit score from Equifax.
Equifax Launches OneScore for Commercial Credit Score
Equifax has launched a new credit score called OneScore for Commercial that is aimed at helping small businesses access more credit opportunities. The score uses financial data from over 33 million businesses and credit information from the business principal to help start-ups and small businesses demonstrate their creditworthiness when applying for loans to fund their growth or overcome financial challenges in a volatile economy. The Equifax Cloud is used to power this single commercial credit score.
Improved Predictability of Credit Risk
Equifax’s research suggests that using the OneScore for Commercial credit scores can help lenders improve their ability to predict risk and increase the number of approved loan applicants by up to 50%. This could lead to a potential increase in access to credit for around 3 to 4 million small businesses, without increasing risk, as lenders can approve 15 to 20 percent more loans.
Dedication to Facilitating Financial Inclusion in Lending
Todd Horvath, President of Equifax US Information Solutions, stated that small businesses are essential for the U.S. economy as they create jobs and reinvest money in communities. Equifax is working on new data and analytics to support business growth and access to capital. Equifax has introduced a new consumer credit score called OneScore, to demonstrate their dedication towards facilitating financial inclusion in lending. Equifax is renowned for its expertise in data and product innovation aimed at expanding credit accessibility.
According to the U.S. Small Business Administration, there are 33 million small businesses in the United States, making up 99.9 percent of all businesses. Between 2020 and 2022, there were 14.9 million new business applications filed. This increase in applications highlights the necessity for commercial lenders to efficiently process applications to meet the demand for capital.
Complete View of a Business’s Ability to Pay
According to Bill Phelan, who is the General Manager of the Equifax USIS Commercial business, lenders in today’s commercial credit landscape want to make credit decisions more efficiently while avoiding greater risk. The OneScore for Commercial credit score can help with this by providing a complete view of a business’s ability to pay. This can enhance the consistency of the lender’s portfolio and boost the credit scores and performance of commercial accounts. Therefore, lenders can have greater assurance when assessing and finalizing accounts.
Utilizing Equifax Commercial Database and NeuroDecision® Technology
The OneScore for Commercial credit score can be used by both financial and non-financial institutions for business purposes. This model utilizes the Equifax Commercial database, which includes various data sources like the Commercial Financial Network, commercial public records, and non-financial business details like payment history with telecom, utility, and leasing companies, along with data on the business owner(s). Equifax utilizes NeuroDecision® Technology, fueled by explainable artificial intelligence (xAI), to enhance its accuracy in forecasting credit scores for 12 key sectors such as retail, real estate, manufacturing, healthcare, agriculture, and more.
Increased Scorable Rates and Credit Score Performance for Commercial Accounts
The OneScore for Commercial credit score solution can help commercial lenders by increasing the scorable rates and score performance for commercial accounts, resulting in saving time and money. This enables lenders to confidently qualify more accounts, providing greater access to credit for more small businesses. Lenders and service providers can already access OneScore for Commercial. Click the provided link to learn more about it.