How to Get Your Beacon Score

Whenever you apply for a loan or credit, the creditor will look at your credit score to determine whether you are an acceptable risk. Credit scores are a three-digit number ranging from around 300 to 850. The higher your score, the better your chances of getting credit with a low interest rate. There are three major credit bureaus in the United States – Experian, Equifax and TransUnion – and each uses its own proprietary scoring model. Beacon is just one of the names that Equifax has used in the past for its scores.

Every time you use a credit card, pay a bill or sign up for a loan, that information gets reported to the three credit bureaus. Each bureau will run the data through its scoring model to come up with a credit score based on your debt load, credit balances and late payments, among other things.

Each bureau has a different name for its scoring model, and they've changed the names fairly regularly over the years. For instance, TransUnion has called its model "Empirica," "Precision" and "FICO Risk Score Next Gen," while Experian has stuck pretty closely to variations on the name "FICO score." Equifax used to call its model "Beacon," which then became "Pinnacle." It's now known as the Equifax Credit Score.™

The name is not important but the number is. The score you get can have a large effect on the interest you pay on any type of consumer credit. Most lenders will be looking at a score around 670 and up before approving you for a loan. If your score is less than 580, you may have difficulty getting credit at all.

The algorithm is a closely guarded secret, so the exact calculation is unknown. However, for all three credit bureaus, the breakdown will probably look something like this:

Payment history (35 percent of the score): Paying bills on time will cause your score to go up; bankruptcies, court judgments, foreclosures, liens, charge-offs, late payments and the like will cause the score to go down.

Debt load (30 percent of the score): Maxing out your credit cards, having lots of open accounts and generally owing a lot of money will impact your score.

Length of credit history (15 percent of the score): A long history of timely payments will improve your score. People with no credit history are an unknown factor for lenders and will score low on this metric.

Types of credit (10 percent of the score): This section looks at the types of debt you owe – mortgage, auto loans, personal loans and credit cards. Holding multiple open credit cards, for example, is likely to affect your score more than having a balanced loan-type mix.

Credit searches (10 percent of the score): Hard inquiries, when a lender with whom you've applied for credit pulls your credit score, get reported to the credit bureaus. Soft inquiries, when you request a credit report for your personal use, do not.

There are three ways to get your Equifax score:

1. Create a "My Equifax Account" on the Equifax website. You can order two free reports each year via your dashboard.
2. Log into your account, click the "Get my free credit score" tab and enroll in Equifax Core Credit™. You can then view your latest credit score for free each month on your dashboard.
3. By federal law, you're entitled to get a free copy of your credit report from each of the three credit bureaus once every 12 months. Credit scores can differ since the algorithms are different, so it's a good idea to track all three scores. You can order your free reports at annualcreditreport.com.