How to Understand Equifax Beacon Credit Scores

FICO 08 is a formula used to help the Fair Isaac Corporation calculate your credit score. FICO 08 looks at your payment history, the amount you owe, the length of your credit history, any new credit you have, and the types of credit youve used. Compiling all this information, the Fair Isaac Corporation is able to calculate your FICO 08 credit score. The credit monitoring company Equifax can provide you with your Beacon credit score. Once you understand Equifax Beacon credit scores, you see that your Beacon credit score is the same as your FICO 08 credit score.

Instructions

1

Determine your Equifax Beacon credit score based on five categories. About 35% of your score depends on payment history and 30% of your score depends on amounts owed. The length of your credit history determines 15% of your Equifax Beacon credit score, and the remaining 20% splits between new credit and the types of credit used.

2

Monitor your payment history, one of the most important elements to your credit score. The payment history category on your Equifax Beacon credit score reflects payments you make on specific accounts such as credit cards, a mortgage, or retail accounts. Any payment delinquency you have will show up in your payment history.

3

Track the amount of money you owe and compare that to your Equifax Beacon credit score. Creditors look at the amount you owe on all of your accounts and the number of accounts you have with balances to help determine your Equifax Beacon credit score.

4

Consider your credit score. Equifax Beacon credit scores run on a scale from 300 to 850. A higher number means a better credit score.

5

Avoid too much new credit, which includes recent credit inquiries and recently opened accounts. Too much new credit can negatively affect your Equifax Beacon credit score.

6

Understand the importance of the length of your credit history. Your Equifax Beacon credit score reflects the amount of time since you opened credit accounts and the amount of time passed since account activity.

7

Remember the types of credit you have. Experts consider the types of accounts you have, such as retail accounts, a mortgage, and credit cards, to determine your credit score.

8

Know the benefits of a higher credit score. Most people have Equifax Beacon credit scores between 600 and 800. If you have a credit score that is 720 or higher, lenders may reward you with a larger line of credit or favorable interest rates.