Beacon Score: What is a Beacon Score? (Complete Beginners Guide)

beacon score

The Beacon Score is just one example of an algorithm or formula used by three major credit rating agencies. for the purpose of presenting a specific customer’s credit score. Discover more about this topic and all you need to know about the Beacon score in this article. Beacon score vs Fico, range, Equifax, and credit. Continue reading!

What is a Beacon Score?

Beacon score now called Pinnacle score is a credit score created by the Equifax Credit Bureau to provide lenders with information about an individual’s creditworthiness. Often, the Beacon score is a credit score determined by a complex algorithm. These numbers give lenders a deeper understanding of their client’s credit history. Which includes their potential ability to repay the debt they are asking for.

However, accurate calculation of the Beacon / Pinnacle rating is the secret of Equifax. But like other credit institutions’ payment histories or expired accounts, the calculation usually includes the length of the credit history. Meanwhile, it also takes into account the type of account used and the credit search limit taken into account.

What Is a Perfect Credit Score 2022?

If you are able to achieve a score of 850, you have achieved the highest possible FICO score, as this is the maximum score you can achieve by increasing your score. However, an exceptional credit score ranges from 800 to 850, which is very close to perfect.

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Beacon Score vs Fico

In Beacon score vs Fico. Creditors typically use a credit score between 300 and 850 to decide whether to accept or disallow borrowers before issuing credit to them. However, the higher the score, the lower the risk. Perhaps, creditors get scores from credit research agencies and these scores can be edited in their credit information for quick and easy analysis. The three most commonly used are Equifax, Trans Union, and Experian, each with its own credit score model.

Generally, the Equifax model generates a beacon credit score based solely on the credit data available on the Equifax system. It takes into account the same information that Fair Isaac Corporation uses to calculate the FICO credit score, but the Beacon score does not always rate these factors as the same.

What FICO Score Do Most Lenders Use?

The FICO® Score 8 is the score lenders mostly use. You should be aware of your FICO® Score 8 if you plan on applying for a personal loan, student loan, or retail credit card.

What Score Is Closest to FICO?

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Beacon Score vs Fico Payment History

The beacon score vs Fico is mostly calculated according to the payment history. If I am not mistaken, almost 35% of their score is represented by their payment history. However, the list of each account in your credit report shows you the number of your payments missed or late.

Moreover, your credit report will also be released if your account is withdrawn for nonpayment or if the loan issuer claims to be a loss. In a case where your payment problems result in foreclosure, bankruptcy, tax liens, court judgments, or wage seizures, it will be shown on your credit report as a public record.

Meanwhile, the more the late payment report is overlooked, the more the payment history destroys your creditworthiness. Basically, public records and write-offs have the greatest impact, so always work on your payment history.

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Beacon Score Credit

Originally, FICO, Isaac, and Company first introduced the basic FICO score in 1989, which standardized the calculation of credit scores. Previously, the results of financial institutions developing their own methodologies based on personal creditworthiness. However, these results varied from one financial institution to another financial institution. Later there was the creation of three national credit agencies, namely Experian, Equifax, and TransUnion. Each of these agencies introduced its own credit rating model.

In regard, every time you pay a bill, buy a product with a credit card or get a loan, the information is reported to these three agencies. However, the use of all complex algorithms can expire.

In general, Beacon / Pinnacle and other credit scores can have a huge impact on the interest rates on all types of consumer loan payments, and lower scores can result in the complete rejection of loan applications.

What is a Good Beacon Score?

The range of credit scores depends on the credit score model used (FICO and vantage Score) and the credit bureau (Experian, Equifax, and TransUnion) that received the score. Below, you can use Experian’s quote to determine the range of credit scores you belong to.

FICO Score

  • Very poor: 300 to 579
  • Fair: 580 to 669
  • Good: 670 to 739
  • Very good: 740 to 799
  • Excellent: 800 to 850

vantage Score

  • Very poor: 300 to 499
  • Poor: 500 to 600
  • Fair: 601 to 660
  • Good: 661 to 780
  • Excellent: 781 to 850

Therefore, the above illustration showed that a good credit score such as Beacon should range between 700 and above. However, the acceptance range used by financial institutions is based on the borrower’s credit score level to qualify the borrower. For example, many mainstream financial institutions reject the credit of borrowers with credit scores below 700. The lender can also consider other details in the borrower’s credit report, but the credit score is usually the main factor.

How Can I Raise My Credit Score 200 Points in 30 Days?

  • Acquire Extra Credit Accounts.
  • Reduce large credit card balances.
  • Always Make payments on time.
  • Keep the accounts you have already.
  • Dispute Erroneous Information on Your Credit Report.
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Beacon Score Range

A Beacon (Pinnacle) score range is the credit score method Equifax uses to derive a loan’s credit score when making difficult queries. Notwithstanding, all three major credit bureaus such as Equifax, Transunion, and Experian have different methods for determining your credit score. Meanwhile, Beacon scores range from 150 to 934, with borrowers with high credit ratings having higher scores and loan opportunities. Try to take a second look at “What is a good Beacon score?” above to have a better understanding of the score range.

Beacon Score Chart

Because the credit score is too high, it is difficult to specify the final standard of good credit. This is because some credit scores may exceed 750 points, while others may be limited to 850 or 990 points. For example, a financial institution that assesses the creditworthiness of a mortgage will consider some points to understand its repayment potential. Therefore, pay your debts on time to increase your credit score.

In addition, scores with a maximum score of 850 are generally considered “good” if the score is 670 or higher. If your credit score is not sure if you can get the lowest mortgage rate, you can always contact your mortgage broker directly.

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Beacon Score Equifax

With Beacon Score Equifax, you will be surprised by certain factors that do not affect your credit score. These items are included in the beacon/peak score calculations or other calculations. Because according to the law, it is not possible to distinguish lenders based on gender, religion, age, race, or spouse. However, there is also no mention of a salary, current employer, job, past work experience, or place of residence.

Perhaps, certain types of “quarantine” loans, such as repayment dates and pawnshop loans, are also not taken into account. However, your credit score does not include child support, rent, and interest paid by credit card.

Do Banks Look at Transunion or Equifax?

Lenders may consider your credit scores from all three credit bureaus and use the median score to determine eligibility. If they only consider two of the three bureaus, they will likely choose the score that is lower of the two. If you co-borrow a loan, the lender will take the individual with the lowest median credit score.

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Free Beacon Score

JohnUlzheimer, the original FICO and Equifax credit expert, recommends checking the credit scores of FICO and vantage Score at the same time and understanding exactly what the loan sees. After all, you never know how many points your potential loan is looking to improve. Also, checking your credit score is free, so you can only benefit from reviewing it. Meanwhile, check your credit score for free on Equifax.

What FICO Score Is Needed to Buy a House?

To qualify for a mortgage loan to purchase a home, your credit score needs to be at least 620. Most conventional loan providers require at least that in terms of credit history before extending credit. Still, there are ways to get a loan even with a low credit score, such as in the 500s.

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When calculating credit scores, the amount you owe creditors is the second most important factor. Practically 30% of the beacon vs fico score range. Part of the score will look at your balance account number, credit card limit, credit card balance, and the remaining amount. However, the secret and best option is to always pay your debt on time.

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