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Beacon Score

The Beacon score is a numeric system of scoring credit reliability that is used by the Equifax credit reporting agency. The higher the score the better it is for the consumer. The main areas of information considered in formulating the Beacon score are payment history, including tardy payments, missed payments and collection matters and judgments that can be discovered through public records; the level of debt carried in all credit accounts; length of credit history; the number of recent credit report requests and recent new credit accounts, and the type of credit accounts held. Becon scores can range from 400 to 850. having a Beacon score below 640 can adversely influence credit potential. If the consumer finds that his or her Beacon score is lower than desired, there are steps that can be taken. The first step should be to carefully review complete and current credit reports for errors, then take the appropriate steps to resolve any resulting credit disputes. If the low score is merited, a credit counselor can provide educational programs and direct assistance in credit and debt management.

Your Beacon score is based on all of your credit-related information, found within your credit report - not just the negative information.

The following is the type of information that the Beacon Score uses to calculate your credit score:

Payment History
Public record and collection items
Severity, recentness and frequency of delinquencies noted in trade line section

Outstanding debt
Number of balances recently reported
Average balance across all trades
Relationship between total balances and total credit limits on revolving trade lines

Check average credit scores to compare your credit score with others in your state.

Credit History
Age of oldest trade line

Inquiries and new account openings
Number of inquiries and new account openings in the last year
Amount of time since most recent inquiry

Types of credit in use
Number of trade lines reported for each type:
Travel and Entertainment cards
Department store cards
Personal Finance company references

The average Beacon score will usually range from 400 to 850. The average Beacon score in the United States is currently 720. The cut-off point for most first-rate banks lies in around a minimum of 640, whereas secondary banks will look for a Beacon score of 540 or higher.

The Beacon Score does not utilize the factors of race, color, religion, nation of origin, sex, marital status, or age in any way throughout their scoring procedures. Additionally, occupation and length of time in the current place of residence are also not factors used. Basically, any information that cannot be found in a credit report, will not be used in a calculation of a Credit Score.

This does not, though, mean that lending institutions won't look at these factors separately. Keep in mind the different values that are connected with the ability to acquire a loan, such as the length of time you've been at your job, and your income. Even if you have an impeccable Beacon score, the average car loan requires that you must make a minimum of $1850 per month for qualification. Similarly, 2 repossessions or an active chapter 13 will almost always earn you an automatic disqualification.