Beacon Score


DEFINITION of 'Beacon Score'

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

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  1. How is my credit score calculated?

    The credit score, commonly referred to as a FICO score, is a proprietary tool created by the Fair Isaac Corporation. This ... Read Full Answer >>
  2. How can I improve my credit score?

    If you are looking to take out a loan or apply for a credit card, then it will be very important for you to have a good credit ... Read Full Answer >>
  3. What is the highest achievable FICO score?

    Your FICO score is used by creditors to determine the overall credit risk of any individual consumer. This score is calculated ... Read Full Answer >>
  4. Does Netspend report to credit bureaus?

    NetSpend does not report to credit bureaus in any capacity. NetSpend is a prepaid debit card program that allows cardholders ... Read Full Answer >>
  5. Is it possible to get a free credit report from Equifax?

    It is possible to get a free credit report from Equifax, as well as the other two major credit bureaus, Experian and TransUnion. ... Read Full Answer >>
  6. Do free credit reports affect your credit score?

    Free credit reports do not impact your credit score. Credit inquiries are divided into two categories: soft inquiries and ... Read Full Answer >>

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