A Beacon score is a number generated by the Equifax credit agency that ranks consumers creditworthiness, so individuals must order their credit reports through Equifax to obtain the score, notes Investopedia. By ordering credit reports through Equifax, consumers can receive their 3-bureau report from all three credit agencies, including TransUnion and Experian, reports Equifax.Continue Reading
TransUnion issues a score known as Empirica, while Experian uses the traditional FICO score, and Equifax uses the Beacon score to determine the creditworthiness of borrowers, explains Investopedia. Although credit reporting agencies use complex algorithms to calculate credit scores, each credit reporting agency uses the same calculation to determine a consumer���s credit score.
Beacon scores affect a borrower���s ability to obtain low-interest rates on loans and mortgages, states Investopedia. The lower a borrower���s Beacon score, the less chance he has of securing a loan with a low-interest rate. NextGen, created by the Fair Isaac Corporation, uses scores known as FICO advanced risk scores used by Experian, Precision scores used by TransUnion, and Pinnacle scores used by Equifax. Many companies now use NextGen FICO scores, and the Pinnacle score replaced the Beacon score. Criteria that affects any credit score include payment histories, types of credit, new credit applications and current debts.Learn more about Credit & Lending