Supporting Small Business Access to Credit with Equifax OneScore

May 02, 2023

SMALL BUSINESSES ARE THE LIFEBLOOD of the U.S. economy, helping cities thrive by creating jobs and putting money back into communities. With nearly 33 million small businesses in the United States accounting for 99.9 percent of all businesses, and with 14.9 million new business applications filed between 2020 and 2022, there is a growing need for commercial lenders to quickly process applications to meet the demand for capital. 

Equifax is helping to open up more credit opportunities for small businesses with the launch of its OneScore for Commercial credit scoring model, which aims to help small businesses gain access to the credit opportunities they need to fuel their growth. Harnessing the power of the Equifax Cloud™, this new single commercial credit score links together financial data on more than 33 million businesses with credit information from the Equifax commercial credit database, including the Commercial Financial Network, commercial public records and firmographic data, and non-financial business information, such as telecommunications, utility and leasing payment history, with the business owner(s). The model also incorporates Equifax's patented NeuroDecision® Technology, powered by explainable artificial intelligence (xAI), which enhances its predictive capabilities and performance.

One of the key advantages of the OneScore for Commercial credit score is its ability to provide a more holistic picture of a business's creditworthiness, especially for start-ups and small businesses. By considering various data points, the score enables businesses to better demonstrate their creditworthiness when seeking financing from lenders. This is particularly important in today's uncertain economic environment where businesses may face headwinds and need access to capital to navigate challenges.

According to Equifax research, the OneScore for Commercial credit score has the potential to score as many as 50 percent more loan applicants. This increased scorable rate and predictive power can enable lenders to approve as many as 15 to 20 percent more loans while maintaining the same risk profile. This could result in approximately 3 to 4 million more small businesses gaining access to credit, which can be a significant boost to their growth prospects.

Bill Phelan, General Manager of the Equifax USIS Commercial business commented, “In today’s commercial credit landscape, lenders want to make more efficient credit decisions without opening themselves up to greater risk. By providing a more holistic picture of a business’ ability to pay, the OneScore for Commercial credit score delivers greater predictability within a lender’s portfolio of business. Helping to improve scorable rates and score performance for commercial accounts canassist lenders as they qualify and close more accounts – with confidence.” 

The OneScore for Commercial credit score is not only designed for use by financial institutions but also by non-financial institutions, such as telecommunications and utility companies, when conducting business. The model covers 12 major industries, including retail, manufacturing, real estate, agriculture, healthcare, and others, making it applicable across various sectors. In addition to helping small businesses gain access to credit, the OneScore for Commercial credit score can also save commercial lenders time and money in the application, credit decisioning, and risk model management processes.

The launch of the OneScore for Commercial credit score builds on our recent announcement of the OneScore consumer credit score, underscoring the Equifax commitment to financially inclusive lending. OneScore for Commercial is available to lenders and service providers now. Visit the link here to learn more.