A Beacon score (now known as a Pinnacle score) is a type of credit score generated by Equifax, a credit-reporting agency, based on information from FICO scores. It’s used by different types of lenders to assess consumers applying for certain types of credit. While you are aware that you have a credit score, you might not realize that you have many different versions of your credit score, not only provided by different scoring companies, but also by the same companies offering variations.
Understanding the different ways in which scoring companies evaluate you will help you understand why you might see different scores for yourself when you look at different credit score apps, websites and credit accounts.
Read More: What Are the Three Credit Bureaus?
What Are Credit Scores?
Credit scores are ratings that lenders use to evaluate your creditworthiness as they decide whether or not to lend you credit, or how much credit to lend you and what rates to charge you. You might have dozens of credit score variations available to lenders.
For example, a lender looking to give you a car loan gets a different credit score for you than a lender looking to give you a mortgage. A lender offering student loans might get a different score than a bank looking at offering you a credit card. That’s because different types of lenders want to know about different aspects of your credit use and history and rank different factors higher or lower than other types of lenders.
What Are Credit Bureaus?
Your credit scores are calculated using information gathered from your credit reports. The three main reporting agencies are Equifax, Experian and TransUnion.
Each one gathers information about your financial history, such as the number of credit accounts you’ve had/currently have, your on-time payment history, the amount of total credit you have vs. the amount of that credit you’ve already used and any bankruptcies, garnishments, debt consolidations or other negative issues you’ve had.
They get this information from lenders, who, in exchange, can purchase credit reports on consumers. You can get free copies of your credit reports once a year by following the instructions at AnnualCreditReport.com. It’s a good idea to do this to make sure they contain no incorrect information about you. You can purchase them more frequently if you wish.
Read More: How to Gain 200 Points Fast on Your FICO Score
What Is a FICO Score?
The main credit scoring agency used by lenders is the FICO score. MyFICO company uses information from the three credit bureau to create your different scores. The three credit bureaus generate their own credit scores using information from FICO. Your FICO score is based on a number of factors:
- Payment history – 35 percent of your score
- Amounts owed – 30 percent of your score
- Length of credit history – 15 percent of your score
- Credit mix – 10 percent of your score
- New credit – 10 percent of your score
What Is a Beacon Score?
A Beacon/Pinnacle score is one of Experian’s credit scores, using only the credit information Experian has on you. While the three different credit bureaus have almost the exact same information on you, one or more of your lenders might not report to all three agencies. That’s why you’ll see different credit scores provided by Equifax, Experian and TransUnion.
Pinnacle scores might vary from other FICO scores because Experian might weigh certain factors differently.
Read More: FICO Score vs. Credit Score: What's the Difference?
How to Monitor Your Scores
In addition to getting your credit reports from the three credit-reporting agencies, you can also purchase the scores each of these credit bureaus generates for you or sign up for a credit monitoring system that updates your scores daily, weekly or monthly. If you have credit cards, most provide free credit scores that are updated monthly. However, if you have four different credit cards, you’ll most likely see four different credit scores each month, based on which credit bureau or other scoring system the banks use.
Steve Milano has written more than 1,000 pieces of personal finance and frugal living articles for dozens of websites, including Motley Fool, Zacks, Bankrate, Quickbooks, SmartyCents, Knew Money, Don't Waste Your Money and Credit Card Ideas, as well as his own websites.