Beacon score is the name given to a FICO score which is based off data that the data furnisher Equifax collects.
This score is used to help determine if an individual's request for a loan or credit card should be approved or denied.
A beacon score can be any number between 300 and 850.
A beacon score can be broken down into five main categories; payment history, credit utilization ratio, length of credit history, recent searches for credit and the types of credit used.
These are also all key components in the FICO score which the beacon credit score is based on.
Payment history is the biggest factor in determining the score, accounting for a massive 35%.
Any late or defaulted payments will hurt and a history of paying on time will increase your score.
Your credit utilization is responsible for 30% of your beacon score.
This is calculated by taking the amount of credit used and dividing it by the total amount of credit available.
Anything between 0.
1 and 0.
3 is good for your score while anything outside this range will lower it.
Length of credit history amounts to 15% of your score, the longer the better.
Recent searches for credit amounts to 10%, making a lot of inquiries in a short period of time will negatively affect your score.
Types of credit used accounts for the last 10%, there are two main types of credit; installment and revolving.
Having a mix will increase your score.
If you want to improve your beacon score then it's important to focus on the things that you can change, such as lowering your credit utilization ratio to the 0.
1 to 0.
3 range.
Another thing worth doing is to get your report from the credit bureau Equifax and then check it to make sure there are no clerical errors or mistakes.
If you do find an error you'll need to compile evidence and then submit this as an Equifax dispute.
If you struggle with paying bills on time then the best thing you can do is to start paying them on time, this might mean creating a budget or setting up an sms reminder with the biller to ensure you don't forget about money owing.
Having a high beacon score will do more than just help you get approved for loans, it's also used to determine interest rates you'll be offered.
The higher your score, the lower the interest rate.
It's also sometimes used by employers when hiring new staff and landlords use it when looking at tenant applications.
This score is used to help determine if an individual's request for a loan or credit card should be approved or denied.
A beacon score can be any number between 300 and 850.
A beacon score can be broken down into five main categories; payment history, credit utilization ratio, length of credit history, recent searches for credit and the types of credit used.
These are also all key components in the FICO score which the beacon credit score is based on.
Payment history is the biggest factor in determining the score, accounting for a massive 35%.
Any late or defaulted payments will hurt and a history of paying on time will increase your score.
Your credit utilization is responsible for 30% of your beacon score.
This is calculated by taking the amount of credit used and dividing it by the total amount of credit available.
Anything between 0.
1 and 0.
3 is good for your score while anything outside this range will lower it.
Length of credit history amounts to 15% of your score, the longer the better.
Recent searches for credit amounts to 10%, making a lot of inquiries in a short period of time will negatively affect your score.
Types of credit used accounts for the last 10%, there are two main types of credit; installment and revolving.
Having a mix will increase your score.
If you want to improve your beacon score then it's important to focus on the things that you can change, such as lowering your credit utilization ratio to the 0.
1 to 0.
3 range.
Another thing worth doing is to get your report from the credit bureau Equifax and then check it to make sure there are no clerical errors or mistakes.
If you do find an error you'll need to compile evidence and then submit this as an Equifax dispute.
If you struggle with paying bills on time then the best thing you can do is to start paying them on time, this might mean creating a budget or setting up an sms reminder with the biller to ensure you don't forget about money owing.
Having a high beacon score will do more than just help you get approved for loans, it's also used to determine interest rates you'll be offered.
The higher your score, the lower the interest rate.
It's also sometimes used by employers when hiring new staff and landlords use it when looking at tenant applications.