With today’s economy, it is essential that you know exactly what your beacon score rating is before trotting off to the bank or any financial institution to get apply for a loan. The Beacon rating rating comes about when your credit financial details are compared and analyzed by the Credit bureau rating company.
The normal Beacon credit range score is between 300 and 850. You should ensure that the details of all your credit activities held by the credit burearu’s are accurate and up to date. This will help to eliminate the potential danger of you getting an improper score rating. You can get a free credit score to check where you stand currently.
Credit score is the main tool that is used to see what a person’s credit worthiness is. It is an expression of potential risk of defaulting on payments. The higher the score, the higher your credit worthiness rises. This makes you a less potential risk when the issue of defaulting is involved.
Uses Of The Beacon Score Ratings System
Various companies use the score rating when they are considering offering you services. Some of the companies that look at this score include insurance companies, mortgage companies, property owners who are considering you as a potential renter, and even some mobile telephone companies.
The one common thing is that they all use the rating to determine your credit worthiness and determine the interest rate that they are going to charge you. The primarily use of the ratings is in regards to the financial institution like banks. If you want to get a loan, the bank will first require your beacon score ratings. If the ratings are good you are not a potential investment risk, thus your loan should be approved quickly. You might also benefit from low interest rate offered. On the other hand, if your rating is bad, the rates go up since the bank will consider you a potential defaulter.
Factors that can affect your Beacon score
1. Payment history. This is perhaps the most important element considered when the credit score are being calculated. Here they look at the when you repay your debts and how many times you have defaulted on payments. In addition, repayment of loans and debts past their due dates is also considered.
2. Credit utilization ratio. This is the total of the available credit that you are currently using, divided by the amount of credit that is available for you to use. The lower the ratios, the better off you are. The optimum ratio that you should attain (or try to get) is around 0.3.
3. Another factor that is considered is the duration of your credit history. This simply means how long have you been using your credit card and repaying the due amount in full. The longer the period of time the higher the overall beacon score will be.
Other factors like the type of credit that you have been using, and your inquiries\application into getting more credit options, are thrown into the mix. They help to calculate the Beacon credit score that you have.
Remember the above is just a small selection of the things that the credit bureau’s look at when calculating your credit worthiness. Other complex factors are included in their calculation thus you need to provide them with all the information that you have.
Ways to improve and increase your beacon score rating
Pick one of the above factors and try to see if you can change it. For example, by positively changing your credit utilization ratio, you will be able to change the overall score that you get. Recheck the credit report from the credit bureau and ensure that no errors are present. Simple clerical mistakes can see your score plummet down and cause you many financial inconveniences.
Pay bills on time. Each month when the credit card bill comes, try to ensure you make full payments. Defaulting on a ten dollar balance is the same as defaulting on a thousand dollar tab (in the eyes of the beacon score rating calculator). Use you credit card on budgeted daily expenses as much as possible. This will rack up mileage on your credit card usage and history, which in turn will reflect on the beacon score rating (positively).
By following a few of simple guideline, you will be well on your way to a better beacon score rating, which will offer you more financial options in terms of loans, if you should need them.