How Is A Beacon Credit Score Calculated
Beacon credit score is the system that Equifax utilizes in order to grade a consumer's credit worthiness. There are several different factors involved to generate a beacon score. Some of these factors include the number of open credit accounts, late payments, judgements, charge offs and the amount of years an account has been opened.
Credit accounts that appear in your beacon score report are known as tradelines. These tradelines are basically any credit that you currently have including credit cards, car notes, mortgages and even utility bills. Some tradelines report automatically every month while others show up on you credit only if you are not paying as agreed.
For the most part, everyone starts their credit history with a clean slate. As you begin to establish a credit history, your beacon score will be judged by your debt to income ratio, meaning the amount of credit you have versus the amount owed. It is recommended that you keep your balances at about 30 percent in order to maintain a good rating.
Derogatory payment history such as late payments and missed payments will also have a great adverse affect on your beacon score. Even if your balances are low, bad payment history is something that can drop your rating dramatically. To maintain a decent rating, you should at least make the minimum payment on all your bills in a timely manner.
Charge offs are also something that you must avoid. A charge off is basically when a bill has fallen several months in default and the creditor decides to charge it off as a loss. Along with judgements, charge offs are probably the most damaging to your credit. A charge off states that you are someone who simply does not pay their bills. These blemishes can also stay on your beacon score report for up to 7 years depending on the state that you reside in.
How Does One Maintain A Good Beacon Credit Score?
In addition to paying your bills on time, and avoiding accounts being close due to non payment, you also must not over extend yourself. It is still possible for you to be denied even if you are never late on your bills. Having too many open accounts is factor that is also utilized in granting credit based on your score. It is wise to only have one type of open account for each credit type. Possessing 20 different credit cards may be considered a high risk to eventually fall into debt.
In summary, a beacon score [http://www.beaconcreditscore.org/] are calculated by the way you handle your finances. The people with the highest scores exhibit an ability to handle high credit limits while maintaining a low balance. Furthermore, people with good credit pay their bills in a timely manner. If you do find yourself in a credit crunch, the best solution is to slow down on spending and lower your balances.
Credit accounts that appear in your beacon score report are known as tradelines. These tradelines are basically any credit that you currently have including credit cards, car notes, mortgages and even utility bills. Some tradelines report automatically every month while others show up on you credit only if you are not paying as agreed.
For the most part, everyone starts their credit history with a clean slate. As you begin to establish a credit history, your beacon score will be judged by your debt to income ratio, meaning the amount of credit you have versus the amount owed. It is recommended that you keep your balances at about 30 percent in order to maintain a good rating.
Derogatory payment history such as late payments and missed payments will also have a great adverse affect on your beacon score. Even if your balances are low, bad payment history is something that can drop your rating dramatically. To maintain a decent rating, you should at least make the minimum payment on all your bills in a timely manner.
Charge offs are also something that you must avoid. A charge off is basically when a bill has fallen several months in default and the creditor decides to charge it off as a loss. Along with judgements, charge offs are probably the most damaging to your credit. A charge off states that you are someone who simply does not pay their bills. These blemishes can also stay on your beacon score report for up to 7 years depending on the state that you reside in.
How Does One Maintain A Good Beacon Credit Score?
In addition to paying your bills on time, and avoiding accounts being close due to non payment, you also must not over extend yourself. It is still possible for you to be denied even if you are never late on your bills. Having too many open accounts is factor that is also utilized in granting credit based on your score. It is wise to only have one type of open account for each credit type. Possessing 20 different credit cards may be considered a high risk to eventually fall into debt.
In summary, a beacon score [http://www.beaconcreditscore.org/] are calculated by the way you handle your finances. The people with the highest scores exhibit an ability to handle high credit limits while maintaining a low balance. Furthermore, people with good credit pay their bills in a timely manner. If you do find yourself in a credit crunch, the best solution is to slow down on spending and lower your balances.
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