What is the 'Beacon Score'

The Beacon score is a number generated by the Equifax Credit Bureau to rank an individual's credit-worthiness. Beacon scores are credit scores, which are determined through a complex algorithm. These numbers tell the lender how likely it is that the borrower will repay the loan. When NextGen FICO scores started being used, the Beacon score was replaced with the Pinnacle score.

Mathematical criteria involved in calculating a Beacon score can include late payments, current debts, length of time an account has been open, types of credit and new applications for credit.

BREAKING DOWN 'Beacon Score'

Beacon and other credit scores affect the interest rate on a loan. If the borrower's score is too low, the lender will charge more interest or may not lend at all.

Each bureau uses a different name for its score, even if it uses the same FICO algorithm to generate the score. For example:
- Experian uses the term "FICO or FICO II",
- TransUnion uses "Empirica"
- Equifax uses "Beacon"

For NextGen FICO scores, (created by Fair Isaac Corp.) the new names became:
- FICO advanced risk score, used by Experian
- Precision, used by TransUnion
- Pinnacle, used by Equifax

RELATED TERMS
  1. Precision Score

    A number used by the TransUnion Credit Bureau to quantify the ...
  2. FAKO Score

    A derogatory term for a credit score that is not one of the FICO ...
  3. Credit Score

    A statistically derived numeric expression of a person's creditworthiness ...
  4. Credit Scoring

    A statistical analysis performed by lenders and financial institutions ...
  5. Bad Credit

    A qualification of an individual's credit history that indicates ...
  6. Business Credit Score

    A number indicating whether a company is a good candidate to ...
Related Articles
  1. Personal Finance

    What Is the Lowest Credit Score?

    Learn about the different types of credit scores available to borrowers, and find out about the lowest scores under each one of those credit scores.
  2. Personal Finance

    Common Things That Improve And Lower Credit Scores

    Credit scores are used by lenders to estimate credit risk. Find out how you can better earn the trust of lenders and reap the benefits.
  3. Personal Finance

    FICO Or FAKO? The Limitations of Free Credit Scores

    There's something you should know about the scores you get from free credit scoring services: They usually are not the same FICO scores lenders pull.
  4. Personal Finance

    More Banks Offer Free (Actual) FICO Scores

    Lenders overwhelmingly use the FICO credit score when it comes to determining creditworthiness. And thanks to a new initiative, consumers can see it too.
  5. Personal Finance

    Getting Your Credit Score from a Bank

    That all-important, once-secret number is now easy to obtain from financial institutions and credit card companies.
  6. Personal Finance

    Is My Credit Score Good Enough for a Mortgage?

    Your score is critical in determining not only whether you'll secure a loan for a home, but also what interest rate you will be offered.
  7. Investing

    5 Things You Need For A Good Credit Score

    How good a credit score you have depends on 5 factors. What they are and what it takes to better your credit rating if it's not as high as you'd like.
  8. Investing

    The Top Credit Reporting Bureaus: How Different?

    Consumers who compare their credit scores across the three agencies may find that the numbers don’t always match.
  9. Personal Finance

    How FICO Scores Are Calculated

    Lenders look at this to determine your credit risk. We explain what it is and how it's figured out.
  10. Personal Finance

    What Do Credit Score Ranges Mean?

    Take a closer look at what credit scores in each range mean for your financial future.
RELATED FAQS
  1. Why doesn't Credit Karma offer FICO scores?

    Credit Karma offers a popular way to track credit scores for free. While it does not offer FICO scores, the information it ... Read Answer >>
  2. How can I increase my FICO score?

    Find out about a few simple, consistent ways to improve your credit score, including how to manage your credit card balances ... Read Answer >>
  3. What are the differences between the three national credit bureaus?

    Read about the main differences between Equifax, Experian and TransUnion. Learn why your credit scores and credit reports ... Read Answer >>
  4. Do mortgage lenders use FICO 8?

    As more lenders employ the FICO 8 credit-scoring system, borrowers should be aware of how this may affect them.. Read Answer >>
  5. Do I need to know all three of my credit scores?

    Find out why it is important to know all three of your credit scores and how these scores can affect credit approvals for ... Read Answer >>
Trading Center