Your credit score can affect your life in several ways. Employers sometimes check credit on job applicants and lenders use credit when making loan decisions. It's important that consumers have a general understanding of what credit scores are.
History
BEACON is a trademark of Equifax. The company first introduced the score in 1989 in partnership with Fair Isaac, inventors of the FICO scoring model. This was the first general purpose risk score made available to lenders.
Function
Each credit bureau has it's own proprietary scoring formula based upon the FICO model. BEACON refers to the formula for Equifax. Equifax uses this formula to create a credit score for consumers based upon data found within the Equifax database.
Significance
The BEACON score differs from the scores used by the other two major bureaus, TransUnion and Experian, because each bureau has it's own formula. As such, consumers will have a unique score from each bureau that may vary by several points up or down.
Considerations
Since Equifax calculates a BEACON score based upon information contained within a credit report, it's important that consumers check their credit report on a regular basis to ensure its accuracy.
Warning
Various online websites sell or give away their own versions of a credit score, but these scores could be misleading, since they're not the ones lenders see. According to Fair Isaac, the FICO scoring model, upon which BEACON is based, is the score used most by lenders.
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