Beacon Score

The beacon score is based on the Fair Isaac model and can be easily broken down into scoring categories; Payment history, this accounts for the biggest percentage of your beacon score (35%) and looks at late or defaulted loan payments. Your credit utilization ration is the amount of credit you've used divided by the total amount of credit you have available, this accounts for 30% of your score. Anything below a credit utilization ratio of 0.3 is good and anything above will negatively impact your score. The length of your credit history accounts for 15% of your beacon credit score, the longer the better. Recent searches for credit accounts for 10% and the other 10% is made up of various other factors such as the types of credit used (the two main types being revolving and installment).

Improving your beacon score in the short term is quite difficult. The easiest thing to do is to get your credit report from the Equifax credit bureau. The check this for any errors, if found you'll need to start an Equifax dispute to remove it and stop it affecting your credit rating.

Another easy thing to do is to lower your utilization ratio to that magical 10-30% range. This means paying down any credit cards or other debt you may have.

The best way to get a good score is to actually prevent it from going bad in the first place. This means paying your bills on time. If you find yourself often forgetting then ask to see if the companies you're dealing with offer a direct deposit option or a reminder service.

It's important to understand what a beacon score is and the factors that affect it. The higher the score the more likely you'll be approved for loans. If you have a higher score you might also be eligible for lower interest rates.