Financial Education


Understanding Credit Rating

What Factors Affect a Score?
Many different formulas are used to calculate beacon credit scores, so individual lenders may come up with a different beacon credit score for a single individual. Most beacon credit scores are based on the following factors, which each model weighs differently:

Payment History
A record of late payments on your current and past credit accounts will lower your score.

Public Records
Matters of public record such as bankruptcies, judgments, and collection items may lower your score.

Amount Owed
Owing too much will lower your score, especially if you are approaching your total credit limit.

Length of Credit History
In general, a credit history that dates back for a longer period of time is better.

New Accounts
Opening multiple new accounts in a short period of time may lower your score.

Whenever someone else gets your credit history report -- a lender, landlord, or insurer, for example -- an inquiry is recorded on your credit report. A large number of recent inquiries may lower your score. Inquiries from lenders sending you pre-approved offers do not count in beacon credit score calculations.

Accounts in Use
The presence of too many open accounts can lower your score, whether you're using the accounts or not.