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WIKI ANALYSIS
Equifax Inc. (NYSE: EFX) is the leading credit report provider in the U.S. and is considered one of the "Big 3" in the credit reporting market. It generated $1.54 billion in revenue (2006) and operates in 14 countries across three continents. Equifax also provides credit scoring, marketing consulting and other credit related services. Equifax also recently acquired TALX, the leading employment verification company in the U.S.
Since the US credit reporting market is now considered mature, Equifax has had to expand its database services to include other services such as marketing and credit scoring, in addition to developing its international divisions. Efforts toward the latter have been quite successful to date with Equifax non-domestic operations growing at double digit rates over the last few years. Among the adverse factors affecting Equifax are the potential for more stringent government privacy policies and the stagnancy of the US housing market in the wake of higher interest rates and subprime lending troubles.
Company Breakdown
Equifax operates in three segments broken down by region and are further brown down by three divisions of service.
Services
- Information Services includes credit reports, credit scores and other related information. Banks, retailers and other lenders buy credit reports to help determine an applicant's(individual or business) eligibility for a loan, offer credit and other business-to-business and business-to-consumer decisions. Credit scores are mathematically based on Equifax credit reports and represent the likelihood that a person will pay his or her debt. Credit scores are important because lenders use credit scores to determine the risk of lending to a particular person or entity, what loans he qualifies for, and at which interest rates.
- Marketing Services uses Equifax's enormous database to prescreen, segment and target consumers. Equifax uses mail and e-mail to directly reach its client's target consumer base and also offers consulting advice and marketing strategy. Equifax's database system has the capability to customize information for its customers and generate mailing lists based on different criteria, such demographic information.
- Personal Solutions is connected directly with consumers who want to buy their credit report in order to monitor their credit status and watch for identity theft. This segment was a large contributor to the over 8 million reports sold in 2004. Equifax's Personal Solutions has set itself apart providing consumers with access to the home sales in their neighborhood as comparable sales to measure the growth of their neighborhood value.
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Customers
Equifax's main clientele consists of banks and credit card companies, but its customers have become more diverse largely due to the rise of identity theft, fraud and more thorough background checks. For example, small businesses, insurance providers, a number of government groups and retailers use Equifax's services to conduct background checks on potential employees, check payment histories and validate the credit of a business. Equifax also caters to individual clients who wish to have access to their credit reports or scores. In recent years, individual clients have been generating more business for EFX.
Attempt to Expand in a Mature Market
Equifax is one of the largest players in a mature credit market. As a result, the growth prospects of its credit reporting business is somewhat limited. Faced with increasing pricing pressure the company is focusing on offering more complimentary services.
- TALX Acquisition: TALX, the leading employment verification company (with 9,000 customers, including 75% of the Fortune 500), complements Equifax's existing services with its Work Number database. The database contains information on 140 million employment records which can be used by lenders to verify income. The Work Number database sets Equifax apart by allowing it to offer TALX's services even in cases where the credit applicant has little or no credit history. TALX reported revenues of $237 million in 2006, up 33% from 2005.
- International Markets: In an effort to further expand, Equifax has begun to establish itself in international markets such as the UK and Brazil. Along with its information services, it started providing other services such as fraud detection and business credit throughout Europe and Latin/South America. Equifax's international branches have experienced a 30% growth over the past year, but will not have a substantial impact the company's earnings in the near future.
| Market | Total % of EFX Rev | Total Revenue (2006) | % Growth ('05-'06) |
|---|---|---|---|
| Europe | 10% | 153.6 M | 8.2% |
| Latin/South America | 10% | 154 M | 21.5% |
Did Equifax actually say your cderit report was frozen? Of did you assume that's what the message meant? If Equifax requested that you mail your request and include copies of your social security card, driver's license, and other personal info, there could be a security problem. They want to make sure they only give the report to the actual person.The cderit bureaus are three completely different companies. It is not unusual to have a problem with one and not the others. Usually the complaint with Equifax is problems freezing the cderit.
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