Equifax Inc. (EFX) announced that it is expanding its portfolio of solutions to help credit issuers and lenders gauge the end consumers’ ability to repay the amount within the stipulated time.
 
In order to provide additional services to the end customer, the company has introduced a variety of   income, spending, credit and wealth solutions that help credit issuers to keep track of the customer lifecycle.
 
This solution takes a macro view of the consumers’ repayment ability and the solution is divided into four major sub-modules. The first module is Ability to Pay and Capacity Scores, which basically ranks households on the basis of their ability to repay financial obligations. Besides it also gauges a consumer’s ability to take additional debt. The second module is Income and Employment Verification, which helps to track the income details of different consumers. The third is Consumers’ Current Monthly Obligations module, which contains updated credit profiles of more than 200 million consumers. The fourth segment is Discretionary Spending Capacity and Disposable Income, which estimates the household discretionary spending pattern.
 
We believe that the continued rollout of new products has resulted in a compelling product portfolio, which should help the company cater to customers across segments.
 
Few months back, the company launched Debt Wise, an innovative product that has helped many consumers plan their debt repayment schedule. At a recent survey by Equifax, around 62% of respondents believed that the product helped them change the way they paid off their debt and around 65% recommended it to others. We believe this is a very cost effective and user friendly product. It comes for less than 50 cents per day. By using Debt Wise, subscribers can now create a personal debt payment plan online in as little as 10 minutes and use it in the privacy of their own home.
 
Equifax launched 52 new products in 2008, which generated over $75 million in revenues for the company. While the impact of new products is not likely to be that substantial in 2009, management currently expects new products to generate an incremental $200 million in 2010.
 
Equifax’s third-quarter revenue was in line with our estimate, while EPS exceeded. However, revenues declined year over year across all segments except TALX. Given the strong correlation to consumer and financial markets, as well as the company’s U.S. exposure, we expect a gradual recovery in results, in-line with the recovery in the U.S. economy.
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