What Is Equifax? A Closer Look at the Credit Reporting Agency
If you’re somebody who has ever applied for a loan or a credit card, there’s a good chance that your credit history has been checked by a credit reporting agency, and one of the oldest, largest and most prestigious agencies that perform this task is Equifax.
What is Equifax and How Does It Work?
Equifax is a credit reporting agency that is based in the United States, and it operates globally. The company’s main business is to collect and store information about individuals’ credit history, which it uses to generate credit reports and credit scores.
When you apply for credit or a loan, the lender will typically request your credit report from a credit reporting agency, such as Equifax. The credit report will contain information about your credit history, such as the number of accounts you have opened, your payment history, and the amount of debt you owe.
Equifax generates a credit score based on this information, which ranges from 300 to 850. The higher your score, the better your creditworthiness.
What Information Does Equifax Collect?
Equifax collects a wide range of information about individuals’ credit history, including:
– Personal information, such as your name, address, and social security number.
– Credit history, such as the number of accounts you have opened, your payment history, and the amount of debt you owe.
– Public records, such as bankruptcies and foreclosures.
– Inquiries, such as when potential lenders or creditors check your credit report.
Why is Equifax Important?
Equifax is important because it plays a crucial role in the credit granting process. Lenders and creditors use the credit reports and credit scores generated by credit reporting agencies like Equifax to determine whether to approve your application for credit or loans.
Equifax is also important because it can impact your life in other ways. Your credit score can affect your ability to rent an apartment or get a job, and a mistake on your credit report can be difficult to fix.
Recent Issues With Equifax
In 2017, Equifax suffered a massive data breach in which the personal information of approximately 143 million people was compromised. The unauthorized access to the sensitive data included names, social security numbers, birth dates, addresses and some driver’s license numbers.
This led to a public backlash against Equifax and calls for greater regulation of the credit reporting industry. Equifax paid $700 million to settle a class-action lawsuit over the data breach, and the company has since taken steps to improve its security measures.
Conclusion
Equifax is a major credit reporting agency that collects and stores information about individuals’ credit history. Its credit reports and credit scores are used by lenders and creditors to determine creditworthiness. While Equifax has faced recent issues, it remains an important institution in the credit industry. It’s important to keep track of your credit history and ensure that the information reported by Equifax and other credit reporting agencies is accurate.
