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Equifax (EFX) Buys DataX to Increase Credit Accessibility

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Equifax Inc. (EFX - Free Report) announced the completion of the acquisition of DataX Ltd. on Jul 16. The financial terms of the deal have been kept under wraps.

Nevada based DataX is a leading specialty finance credit reporting agency and provider of alternative data. It has now become part of the banking and lending division of Equifax.

A glimpse at Equifax’s price trend reveals that the stock has gained 6.8% year to date, outperforming the Zacks S&P 500 Composite’s rally of 5%.

 

Targeting the Underbanked

The acquisition adds DataX’s alternative credit and payment data, analytics and identity solutions for underbanked consumers to Equifax core credit database. This, in turn, enables Equifax expand borrowing options for the underbanked population in installment loan, rent-to-own and lease-to-own markets.

Additional benefits from DataX include credit reporting, ID verification, bank account verification and custom risk services. Also, DataX’s data assets complement Equifax’s centralized repository of payroll data, The Work Number database.

Trey Loughran, president of United States Information Solutions stated, "Giving consumers fair access to credit has always been a key economic driver for upward mobility, and this acquisition will help more consumers gain access to credit and capital. He further mentioned, "The combination of DataX's data with Equifax's unique and robust data assets will add more depth to consumer's profiles and will help lenders expand borrowing options."

It’s worth mentioning that acquisitions have been a key growth catalyst for Equifax. The company has been continuously acquiring and investing in companies globally and internationally to supplement its core business, strengthen market share and increase its geographic presence.

Zacks Rank & Stocks to Consider

Currently, Equifax has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Business Services sector include WEX (WEX - Free Report) , IQVIA Holdings (IQV - Free Report) and Paychex (PAYX - Free Report) . All the stocks carry a Zacks Rank #2 (Buy).

The long-term expected earnings per share growth rate for WEX, IQVIA Holdings and Paychex is 14.3%, 11.8% and 8.2%, respectively.

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