The Historical Evolution of Equifax and the Credit Bureau Industry

This is Matt Reustle and today we are breaking down the data services giant, Equifax. Experian, TransUnion, and Equifax have built this fascinating oligopoly worth studying, but the business has extended well beyond the credit checks on mortgages. Their employee verification tool, The Work Number, may be their most valuable asset today.

To break down Equifax, I'm joined by Mo Spolan, analyst at Weitz Investments. We dive into both sides of the business, the unique industry structures that they sit in, the history around competition, and Equifax's future outlook.

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Show Notes

(00:00:58) - (First question) - How Equifax extends beyond credit checks

(00:05:02) - Evolution from the Wild West of credit to a tech-driven, regulated oligopoly

(00:10:21) - Give-to-get model builds network; compiles detailed credit history

(00:12:16) - How credit bureaus grow with GDP and loan volumes

(00:15:19) - The shift from three to two credit checks for mortgages

(00:23:16) - Facing cyclical shifts, credit bureaus' margins decline with IT investments

(00:25:29) - How The Work Number, acquired by Equifax, has evolved into a critical income verification service

(00:28:50) - Ingesting exclusive data, Equifax dominates income verification via a large network

(00:32:51) - How Work Number stays atop the verification market despite competition

(00:43:36) - Increasing Work Number margins lift Equifax; HR paperwork still strategically important

(00:44:57) - Work Number poised for solid double-digit growth; boosts overall business outlook

(00:51:15) - The 2017 Equifax breach led to executive shakeup and strategic focus shift

(00:55:57) - Increasing competitive intensity, aggressive pricing, and potential regulation are key risks for Equifax

(00:59:46) - Lessons learned from studying Equifax