What Is a Beacon Score on a Credit Report?
Credit scores and credit reports reflect a complex mathematical formula that credit-rating agencies use to calculate the risk of lending money to you. The beacon score on a credit report is just one of several names for your credit rating.IdentificationA “beacon score” is just the official name for the FICO score that appears on the credit reports for Equifax, one of the three major credit-reporting agencies, according to Privacy Rights.ConsiderationsExperian uses an “Experian score,” and TransUnion uses an “Empirica” score. All three of these are used interchangeably, Investopedia says.EffectsThe beacon score on an Equifax report determines how much interest you pay on a loan, Privacy Rights reports. Generally, beacon scores above 720 will garner the lowest interest rates.FeaturesThe major factors that determine a beacon score are debt obligations, late payments, credit history, type of credit and the number of loan applications, Investopedia says.TipsAvoiding credit does not increase
Most people know the importance of their credit reports. They realize that a positive report will help them get loans and open credit card accounts, while one that is filled with negative information will keep them from being able to get credit. However, they are often unaware that many lenders look at their Beacon score to get a “snapshot” view of their creditworthiness. This score summarizes their credit history into a simple three-digit number what carries a great deal of importance in determining whether a lender will give them money or allow them to open an account.
