Business Breakdowns
Episode 130 Equifax: Your Score & More
Business Breakdowns

Episode 130: Equifax: Your Score & More

Business Breakdowns

Episode 130

Equifax: Your Score & More

Mo Spolan is an analyst at Weitz Investments. We cover Equifax's long history as a credit reporting bureau, the competitive dynamics and pricing structure of the industry, and why its employee verification tool is now its crown jewel.

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(00:01:48) - (First question) - How Equifax extends beyond credit checks
(00:05:52) - Evolution from the Wild West of credit to a tech-driven, regulated oligopoly
(00:11:11) - Give-to-get model builds network; compiles detailed credit history
(00:13:06) - How credit bureaus grow with GDP and loan volumes
(00:16:09) - The shift from three to two credit checks for mortgages
(00:24:06) - Facing cyclical shifts, credit bureaus' margins decline with IT investments
(00:26:19) - How The Work Number, acquired by Equifax, has evolved into a critical income verification service
(00:27:40) - Ingesting exclusive data, Equifax dominates income verification via a large network
(00:33:41) - How Work Number stays atop the verification market despite competition
(00:44:26) - Increasing Work Number margins lift Equifax; HR paperwork still strategically important
(00:45:47) - Work Number poised for solid double-digit growth; boosts overall business outlook
(00:52:05) - The 2017 Equifax breach led to executive shakeup and strategic focus shift
(00:56:47) - Increasing competitive intensity, aggressive pricing, and potential regulation are key risks for Equifax
(00:60:36) - Lessons learned from studying Equifax

Equifax: Your Score & More

Introduction

Matt
This is Matt Reustle, and today, we are breaking down the data services giant Equifax. Now historically, I thought of Equifax as a credit bureau. And you have Equifax, Experian, and TransUnion that built this fascinating oligopoly worth studying, but the business has extended well beyond the credit checks on mortgages, and their employee verification tool, The Work Number, might actually be the crown jewel asset today.

So to break down Equifax, I'm joined by Mo Spolan, analyst at Weitz Investments. And we get into both businesses, the unique industry structures that they sit in, the history around competition, and the outlook from here.

And one quick note before we transition to the episode, the newest podcast from Colossus, The Art of Investing, is dropping next week. This is going to be a series of discussions with the world's best investors, company builders, academics, perhaps athletes, artists, any human beings devoted to exploring the joys of compounding in all its forms, and we're dropping our initial episode with Berkshire's Todd Combs next week.

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