The BEACON score was created by Equifax and Fair Isaac to evaluate the chance that a consumer will become seriously delinquent in his credit accounts in the next two years. An algorithm analyzes a consumer's credit report to determine how large a credit risk he is, and then returns a score number that represents that level of risk. The BEACON score is fluid -- it's based on exactly the information that's in the credit report at the time the score is requested. You can raise your BEACON score in the same ways you'd raise your FICO and other credit scores: by using and managing your credit wisely.
Pay Bills on Time
Paying bills on time is the first tip Equifax recommends. Equifax and Fair Isaac, which issues the FICO score, both stress that late payments can lower your score significantly. Late payments also increase the chance that your accounts will go into collection. Creditors report collection activities. Collections have a more serious negative effect on your score than do late payments on accounts that haven't gone into collection, so it's best to nip the possibility of collection in the bud.
Pay Down Balances
MSN Money stresses the importance of paying down your balances. This is especially true with revolving accounts, like credit cards, which have a stronger impact on your score than do installment accounts like student and car loans. Ideally, your credit-card balances always should stay below 30 percent of your credit limit. In this regard, it doesn't matter if you pay off your cards each month because the amounts considered in your credit scores is the highest balance. MSN Money recommends reducing the balance on the cards that are closest to their credit limits first.
Re-Establish Credit
According to Equifax, you should re-establish credit to overcome credit problems you've had in the past. It recommends making all your applications within a short period so that the inquiries on your account are interpreted as being for a single line of credit rather than a number of different lines. Use your new accounts wisely. It's fine to use them frequently, but keep your balances low all the time and pay your bills on or before the due date.
Dispute Negative Information
Contact Equifax (see Resources) to dispute negative information you believe to be inaccurate. Since negative information lowers your score, it stands to reason that removing these blemishes will increase it. Items MSN Money deems worth following up on include inaccurate records of late payments, collections and charge-offs; erroneous credit limit notations, if the limit is noted as being lower than it really is; accounts you paid as agreed but are marked as charged off or settled; and old negative items that should no longer be included, like bankruptcies older than 10 years and late payments and collections older than seven years.
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