Equifax Buys Another Credit Bureau, Gains Access To More Data
Atlanta-based Equifax bought DataX, which has built a financial database focused on people who have trouble getting credit cards or traditional bank loans.
Mike Stewart / Associated Press file
Equifax Inc. made a purchase this week that will expand its ability to collect data on consumers. It bought another credit-reporting bureau, called DataX Ltd.
Atlanta-based Equifax sells consumer financial information to lenders deciding whether to grant credit. DataX, based in Las Vegas, has built a financial database focused on people who have trouble getting credit cards or traditional bank loans. Those consumers often rely on services like payday loans, which don’t usually get reported to Equifax.
In a press release, Equifax said that by acquiring DataX, it will now be able to help lenders better understand these potential borrowers and expand their credit access by gaining access to this information.
Jon Geidel, president of DataX, said in the statement that the move “affords consumers better access to the credit they deserve to meet their financial needs.”
But some aren’t convinced.
“If what they’re acquiring is payday loan customer information, I’m not quite sure that’s going to help,” said Chi Chi Wu, staff attorney at the National Consumer Law Center, a nonprofit advocating for low-income and disadvantaged Americans.
She said many in DataX’s system are already monitored by big credit bureaus like Equifax. They just have scores that are too low to get a loan.
Equifax says the acquisition will make those existing files more complete.
Spokesman Wyatt Jeffries explained, “While we have a file on 300 million consumers, DataX has different, deeper data on underbanked individuals than we have today.”
To Wu, Equifax is simply expanding its reach, not helping anyone.
“They already have this massive amount of mainstream credit data on over 200 million Americans, but they want more,” she said. “As we’ve seen from the Equifax data breach, how are they handling that data, how are they protecting that data, what are they using it for? Data in and of itself isn’t necessarily good or bad. It’s how it’s used.”
She said because payday lenders generally don’t report to the major credit bureaus, one way to gain that information is by purchasing “specialty databases,” like DataX. The two other major credit bureaus, Experian and TransUnion, have made similar acquisitions of data on this segment of the population over the past year.
Any growth of Equifax’s data trove is an issue, said Mike Litt, who is a campaign director at the consumer advocate U.S. Public Interest Research Group.
“The reason why the Equifax acquisition is concerning is because we’re all still waiting for Equifax to be held accountable for last year’s massive data breach,” he said.
A cyberattack on Equifax exposed the personal information of about 150 million people last fall.
“Ultimately, you need financial penalties if you want the credit bureaus to take our data security seriously, but unfortunately, Congress has failed to provide those consequences,” Litt said. “And in the meantime, you have one of the three big gatekeepers to our personal information, Equifax, collecting even more of it.”
Ninety percent of lenders rely on credit scores from Equifax, Experian and TransUnion.
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