CompanyGraph
Equifax Inc.
EFX · NYSE Arca · United States
Equifax sells lenders a single instant lookup that returns both a borrower's credit history and their current salary.
Equifax holds one of only three federal designations as a Nationwide Consumer Reporting Agency, which means the 10,000-plus creditors who want to participate in regulated U.S. lending are required to route borrowers' payment histories through Equifax — so the data feeding its 820 million consumer credit files arrives not by commercial agreement but by legal obligation. Layered on top of that is the Work Number, a database built from direct payroll connections with 2.5 million employers that pushes live salary and employment status into Equifax automatically, so when a mortgage underwriter or auto dealer runs a single query they get back both a credit file and a confirmed current income in seconds — a combination that takes competitors days to assemble through phone calls and paper documents. Because point-of-sale auto financing and same-session mortgage approvals are now built around that instant response, lenders face six to twelve months of rewiring costs if they want to switch, which keeps the query volume — and with it the per-inquiry revenue — locked in. The business's main fragility sits on the employer side: if enough large companies switched payroll platforms or renegotiated their data-sharing terms and stopped sending live feeds to the Work Number, the real-time income layer would collapse back into the same slow manual process competitors use, and the bundled query that no one else can replicate would stop being special.
How does this company make money?
Equifax charges lenders a fee each time they pull a credit report or score. Employers pay a monthly subscription to access the Work Number's employment verification records. Businesses that need identity verification pay under annual contracts. Individual consumers pay directly for credit monitoring subscriptions and to access their own credit reports.
What makes this company hard to replace?
A lender switching away from Equifax faces six to twelve months of technical work to connect to a different bureau's systems, and during that time it has to maintain reporting relationships with both bureaus at once. Employers connected to the Work Number have to go through a full re-credentialing process with any new employment verifier before they can use it. Consumers who use Equifax for credit monitoring would lose their historical credit file records, which cannot be reconstructed using a different bureau's data.
What limits this company?
When a consumer disputes something on their credit file, a real person at Equifax has to review that case individually — federal law requires it and it cannot be handed to a machine. So as the number of consumer files grows, the number of staff needed to handle disputes grows with it. The same problem applies to the Work Number: verifying employment records that touch lending decisions requires people who understand both data systems and FCRA rules in detail, and that kind of expertise takes years to build inside a bureau. Equifax cannot hire its way out of this quickly.
What does this company depend on?
Equifax cannot operate without payment history data flowing in from major banks like JPMorgan Chase and Wells Fargo. It also relies on public records access from county courthouses and bankruptcy courts, death file data from the Social Security Administration, reciprocal data-sharing arrangements with Experian and TransUnion under FCRA rules, and AWS cloud infrastructure to store and serve the credit file databases.
Who depends on this company?
Mortgage lenders depend on Equifax's automated credit verification to approve loans on time — without it, approvals would slow significantly. Employers using the Work Number rely on it to verify income and employment details across 105 million employment records. Auto dealerships depend on Equifax's instant credit score delivery to make financing decisions at the point of sale; if that instant response disappeared, same-day car financing would stall.
How does this company scale?
Once a consumer's credit file exists, generating another credit report from it is cheap — it is just a database query and some formatting, so each additional inquiry costs very little. What does not get cheaper as the company grows is the human review required every time a consumer disputes their record or when FCRA compliance must be checked on employment verification cases. Those tasks require skilled staff and case-by-case attention, and that cost rises in step with volume.
What external forces can significantly affect this company?
When the Federal Reserve raises interest rates, fewer people take out mortgages and car loans, which means fewer credit checks and less revenue for Equifax — with no change in how the company itself operates. European GDPR rules and U.S. state laws like the California Consumer Privacy Act require consumer consent for data collection in ways that conflict with the automatic credit reporting model Equifax is built on. Growing consumer awareness of credit freezes also threatens revenue, because a frozen credit file legally blocks the inquiries that generate per-query fees.
Where is this company structurally vulnerable?
If a large number of major employers ended their direct payroll connections to the Work Number — because they switched to a payroll platform that does not pass data to Equifax, or because a data breach caused them to renegotiate their sharing agreements — the real-time income layer would collapse back into the same slow manual process every competitor already uses. That would eliminate the one thing that makes the bundled instant query worth a premium, and the auto dealers and mortgage lenders who built their approval workflows around Equifax's speed would have no reason to pay for it.