Credit, Credit & My Credit » BEACON SCORE http://1888mycredit.com CREDIT REPORT, CREDIT SCORE & CREDIT CARD Sat, 07 Aug 2010 06:05:21 +0000 en hourly 1 http://wordpress.org/?v=3.0.1 How to Understand a Beacon Score http://1888mycredit.com/understand-a-beacon-score/ http://1888mycredit.com/understand-a-beacon-score/#comments Wed, 04 Aug 2010 08:48:40 +0000 admin http://1888mycredit.com/?p=507 The term Beacon score refers to your credit score. It is often referred to as your FICO, which is an acronym for the credit score model developed by the Fair Isaac Corporation. Your credit scores tells the lending institution the probability of your paying your debt by the due date each month. The Beacon score is . . . → Read More: How to Understand a Beacon Score]]> The term Beacon score refers to your credit score. It is often referred to as your FICO, which is an acronym for the credit score model developed by the Fair Isaac Corporation. Your credit scores tells the lending institution the probability of your paying your debt by the due date each month. The Beacon score is a factor in determining your ability to secure credit. It also determines the interest rate  you will be able to obtain on your credit.

Step 1

Acquire your free credit report. You can obtain your credit report for free by visiting the Annual Credit Report website (see Resources). You are allowed one free credit report annually from each of the three largest credit report agencies. The three major credit reporting agencies are Experian, Equifax, and TransUnion.

Step 2

Understand the components of your Beacon score. Your credit score is based on a calculation as disclosed by the Fair Isaac Corporation. It is based on a number of factors with approximate weights given to each as disclosed by the FICO. Late payments, bankruptcies and collections, current debt, length of account existence, type of credit such as installment, revolving or finance company, and applications for new credit and inquiries all play a role in the calculation. As expected, late payments and current debt are heavily weighted in the calculation.

Step 3

Know a good credit score. From a minimum of 300 to a maximum of 850, there is a wide range in credit scores. In general, a credit score of 650 is considered to be the lowest credit score required to obtain a fairly good credit rate.

Step 4

Compare your credit score to that of the range. There is an inverse relationship between the credit score and cost of borrowing. That is, a higher credit score results in a lower interest rate or cost of borrowing. See the Resources section for the link to the Fair Isaac Corporation interest rates and credit scores.

Step 5

Obtain your credit report every 12 months to review for errors.

]]> http://1888mycredit.com/understand-a-beacon-score/feed/ 0 Fico Beacon Score Vs Vantage Credit Score http://1888mycredit.com/fico-beacon-score-vs-vantage-credit-score-2/ http://1888mycredit.com/fico-beacon-score-vs-vantage-credit-score-2/#comments Wed, 10 Mar 2010 11:40:09 +0000 admin http://1888mycredit.com/?p=66 You have probably heard the term ‘credit score’, but are you aware there are two major types? Here we will review the major differences between the FICO Beacon score and the Vantage score. Understanding how these work will improve your chances of building a solid history of paying on time.

The typical FICO rating will range from . . . → Read More: Fico Beacon Score Vs Vantage Credit Score]]> You have probably heard the term ‘credit score’, but are you aware there are two major types? Here we will review the major differences between the FICO Beacon score and the Vantage score. Understanding how these work will improve your chances of building a solid history of paying on time.

The typical FICO rating will range from 300-850, with 850 being excellent rating. Typically, a measurement of 620 is the dividing line between prime credit (lower interest rates) and sub-prime (much higher rates). With this in mind it is easy to see how maintaining as high a measurment score can save you a considerable amount of money in the long run.

To determine the differences between a FICO score and a Vantage let us look at how the FICO score is calculated. Typically it is calculated as follows:

  • 35% based on payment history. More weight is applied to recent payments as compared to past payments.
  • 30% based upon the amount of debt you are carrying.
  • 15% based upon length of payment history. The longer the better.
  • 10% based upon recent inquiries. The fewer the better.
  • 10% based upon your credit mix. The more diversified (mortgage, car loan, cards, etc) the better.

The Vantage  was developed by the three major credit-reporting agencies as a better representation of one’s creditworthiness. While the FICO score remains the most popular,  the Vantage is catching on. These scores runs on a scale of 501-990 and issues a letter grade to the measurment. Let us look at the components of the Vantage to see how it differs from the FICO.

  • 32% based upon payment history. Similar weighting as FICO.
  • 23% based upon total credit available.
  • 15% based upon the portion of your score contributed by your outstanding balances.
  • 13% based upon the kinds of credit held and how long you have held them.
  • 10% based upon the number of recently opened accounts and number of recent queries.
  • 7% based upon the total dollar amounts you could potentially use.

The FICO Beacon score was once synonymous with the term ‘credit score’, but the Vantage score seems to be gaining ground. As shown above there are differences between how the FICO score and the Vantage score are calculated. Understanding how each score is calculated can help you make better credit decisions to maintain an excellent credit rating

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