A free credit report is available under Federal law at: AnnualCreditReport.com.

Beacon Score Defined


Based on the FICO system of credit score determination, the beacon credit score system is used often in credit assessments. The beacon credit scores are used by the Equifax Corporation, which is one of the three major federally approved credit reporting agencies in the United States

 

 

Beacon credit scores are used for evaluating the financial potential of borrowers, and moreover their potential risks for loan default.   \This is when someone either fails to make payments or cannot make complete payments on loan terms.

 

Video: Equifax, Inc.

 

Beacon scores range from 300 to 850, like the other credit scores. Beacon credit scores are also computed on the basis of the credit reports, just as is the case with FICO. These scores are based on various analyses, such as the payment history of debtors including their jobs, income, and change of address, inquiries (checks into credit history by lenders), payments made on-time and late, and debts accumulated in total. This credit score is computed through software on the basis of these analyses that are provided in the credit reports and a number is given.  This number will determine significantly the consumer’s ability to borrow.

 

equifax beacon

 

Equifax and Credit Scores

 

Equifax is one of the major 3 credit reporting bureaus in the U.S. Equifax also works under the FCRA set of credit laws and is therefore obligated to provide a free credit report to all the citizens of the U.S. that it maintains files on. The law requires that a credit report, not credit or beacon score, be provided.  A score must be requested separately and must be paid for in most cases. 

 

Equifax is reputed for being well-versed in calculating credit scores based upon credit history of debtors and borrowers. The credit scores are then used by the lenders to evaluate the creditworthiness of the debtors and their ability to repay the loan. The Equifax bureau uses the beacon credit score exclusively. They use a mathematical equation based on information which is gathered from the credit file. The credit scores are directly related to the credit reports and the information contained therein. Therefore, any improvement or negative additions to the credit report will be reflected on the credit score immediately, both beacon and FICO.

 

Video: What's a Beacon Score?

 

Factors Determining the Equifax Credit Scores

 

equifaxEquifax credit scores, which are based on the beacon scale, are computed on the basis of certain factors. These include the payment history of debtors such as late payments or missed ones, cleared (charged-off) debts and bills and other account changes. The total outstanding amount of credit owed by the consumer is also a determining factor for credit scores. Too much outstanding debt, or a lopsided debt to income ratio, can both be signals of a failing credit profile.  The duration of the credit owed and related factors such as account history will directly affect credit scores. Too many inquiries also lower credit scores when they are allowed to accumulate. These peeks into your credit score should be minimized whenever possible.  Judgments against debtors like bankruptcies and collections mandated from a court settlement will negatively affect credit scores on the beacon system when present.  These items will also remain three years longer on the report and subsequent score than the normal seven years allotted for other items.

 

Beacon Credit Rating

 

The beacon score rates debtors on the range of 300 to 850, just like FICO. Scores from 800 to 850 are excellent credit scores. Scores ranging from 650 to 800 are good credit scores while the scores from 500 to 650 are average scores. Scores below 500 are considered to be bad credit while the scores lower than 400 are very poor credit scores.





To request your free annual report under that law, you must go to : www.annualcreditreport.com