Beacon Score Credit Rating Tips

Beacon score is another name for FICO or credit rating, and this term is used exclusively by the Equifax Credit Bureau. A high Beacon, or credit score, places you in the prime category for credit cards, auto loans and mortgages. Being a good or ideal candidate for loans usually results in better interest rates and terms. Sadly, some people don't maintain an acceptable credit rating (650 or higher). But even if you've always had a low score, you can improve your Beacon with a few simple measures.

Credit Card Balances

Expanding the gap between your credit card balances and your actual credit limit helps increase your Beacon score. Credit card companies and other lenders prefer applicants who demonstrate self control. Having a significant amount of available credit on a credit card proves that you're able to manage credit wisely. Keep credit card balances below 30 percent of your credit limit and get into a habit of paying down credit card balances monthly and only use credit when you can afford to pay off new charges.

Payment History

Keeping an acceptable credit rating is as simple as paying your bills on time. Even if you don't have the means or disposable income to completely wipe away debt, aim to pay credit card companies and other lenders on or before the due date to avoid late fees and delinquency notes on your credit report. Online bill payment systems can help you manage your finances, as do automated payment drafts. Signing up for online bill pay is free, and financial institutions tend to offer same-day posting.

Removing Negative Remarks

Avoiding collection accounts and judgments is imperative because once these remarks land on your credit report, they can remain for up to seven years. Removal of liens, judgments and collection accounts depends on the reporting creditor. Paying off an old debt doesn't guarantee its removal from your credit report. But if you ask kindly and work with creditors to pay off your old debts, they may update your credit report as a courtesy and delete the negative entry. Getting rid of negative remarks can add points to your Beacon score.

Add New Accounts

Credit scores don't automatically increase after acquiring one credit account. Diversifying and managing several different types of credit lines can help increase your Beacon score. If you already have a store or gas charge card, consider applying for a major credit card or perhaps an auto loan to build your credit history and raise your score. Find a local dealership that offers auto loans to people with limited credit histories and talk to your bank about secured credit cards. Secured credit cards require a security deposit between of $300 to $500, which acts as collateral for the line of credit, says Bankrate.com. These accounts are easier to acquire if you have no credit or bad credit.