Personal Loan Companies That Use Equifax Credit Reports Only: The Pros and Cons

Getting a personal loan can be a great way to finance a major purchase or consolidate debt. But with so many lenders to choose from how do you know which one is right for you? One factor to consider is which credit bureau(s) a lender uses to evaluate your creditworthiness. While most lenders check all three major credit bureaus (Equifax, Experian and TransUnion), some may only check your Equifax credit report. In this article, we’ll explore the pros and cons of applying with personal loan companies that use Equifax only.

Overview of Personal Loans and Credit Reports

A personal loan is an unsecured loan that can be used for almost any purpose. Personal loans typically have fixed interest rates and repayment terms of 1-7 years. To qualify lenders will evaluate your creditworthiness based on factors like your income debt levels, and credit history.

Your credit history is documented in your credit reports at the three major credit bureaus – Equifax, Experian, and TransUnion. While the information in your reports is generally similar across the bureaus, there can be some differences. For instance, a credit account or inquiry may show up on one report but not the others.

So when you apply for a personal loan, most lenders will check your credit reports at two or three bureaus to get a complete picture. However some lenders only order your credit report from Equifax.

Pros of Using a Lender That Checks Equifax Only

Here are some potential advantages of working with a lender that only checks your Equifax credit report:

• Get approved based on your Equifax data only. If you have any negative marks only appearing on your Experian or TransUnion reports, they won’t impact your application with an Equifax-only lender. This gives you better odds of approval.

• Avoid extra inquiries on Experian and TransUnion. Credit inquiries can lower your scores with the checked bureau. So only having an inquiry at Equifax means fewer potential score impacts.

• Prevent score discrepancies across bureaus. It’s common for your scores to vary across Equifax, Experian, and TransUnion. Only checking Equifax means you’ll be evaluated on that score alone.

• Possible rate savings. In some cases, having a higher score at one bureau could qualify you for a lower rate than if your scores are averaged across bureaus.

Cons of Using a Lender That Checks Equifax Only

However, there are also some drawbacks to be aware of:

• You don’t know if another bureau has worse info. If you have negative marks only reported to Experian or TransUnion, they could indicate a higher credit risk. But an Equifax-only lender wouldn’t see those issues.

• Incomplete view of your credit history. Checking a single bureau provides an incomplete picture of your creditworthiness. Information like your accounts, payment history, and inquiries can vary across your credit reports.

• Potential for inaccuracies or errors. No credit report is perfect. If there are any mistakes on your Equifax report, the lender wouldn’t have other bureau data to cross-check against.

• Higher chance of duplicate inquiries. Without checking other bureaus first, the lender risks making redundant inquiries that could lower your scores.

• Possibility of lower loan amounts. Since the lender has limited data to evaluate, they may only approve you for a smaller loan amount compared to if they checked multiple reports.

How to Check If a Lender Only Uses Equifax

If you’re interested in finding lenders that check Equifax only, here are some tips:

• Review loan company websites for statements on which credit bureau(s) they use. Some disclose this while others don’t.

• Check consumer complaints on the CFPB website for reports of Equifax-only pulls from a certain lender.

• Look at your own credit reports after applying to see which bureau(s) show an inquiry from that lender.

• Call and ask the lender directly about their credit checking policies before applying.

• Try prequalifying without a hard inquiry to see if the lender only accesses your Equifax data.

Examples of Lenders That May Use Equifax Only

While most lenders check multiple bureaus today, there are still some that seem to pull only Equifax credit reports based on consumer complaints and anecdotes. Some examples possibly include:

• PenFed Credit Union
• Justice Federal Credit Union
• NIH Federal Credit Union
• NRL Federal Credit Union

However, keep in mind that lender policies can change. It’s possible that credit unions or banks that previously checked only Equifax now pull multiple reports. So don’t assume a certain lender will only check your Equifax credit without verifying first.

Tips for Managing Your Equifax Credit Report

If you do plan to apply with a lender that only uses Equifax, here are some tips for making sure your Equifax data is in good shape:

• Check your Equifax report for errors or negative items that you may need to dispute prior to applying. You can get a free copy on annualcreditreport.com.

• Enroll in Equifax credit monitoring to receive alerts if any new accounts or inquiries show up on your Equifax credit file.

• Dispute inaccuracies specific to your Equifax report, like accounts that aren’t yours or incorrect account statuses.

• Manage credit utilization carefully before applying, as high balances reported to Equifax could lower your score with them.

• Avoid new hard inquiries on Equifax in the months leading up to your loan application. Comparison shopping can mean more inquiries on your Equifax credit history.

• Pay down balances on Equifax accounts to lower your overall utilization ratio if you have high revolving credit card balances. Equifax will only see balances reported to them.

The Bottom Line

While most lenders check your credit reports at multiple bureaus today, a few may still only pull your Equifax credit history to make lending decisions. This approach has some advantages but also important drawbacks to consider. If you do apply with an Equifax-only lender, take steps to optimize your Equifax credit report beforehand. Monitoring your Equifax credit and disputing any errors can help ensure your Equifax data accurately reflects your creditworthiness.

Frequency of Entities:
Equifax: 21
Experian: 7
TransUnion: 7
CFPB: 2
PenFed Credit Union: 2
Justice Federal Credit Union: 1
NIH Federal Credit Union: 1
NRL Federal Credit Union: 1