The Beacon (Pinnacle) Score is a credit score generated by the Equifax Credit Bureau to provide lenders with insight on an individual's creditworthiness.

What Is the Average Credit Score in the U.S.?

The Beacon Score, which has since transitioned to the Pinnacle Score, is a credit score generated by the Equifax Credit Bureau to provide lenders with insight on an individual's creditworthiness. Within these two categories, they have a range of methodologies, including Beacon 5.0 Base, Beacon 5.0 Auto, Beacon 5.0 Bank Card, Beacon 09 Base, Beacon 09 Auto, Beacon 09 Bank Card, Beacon 09 Mortgage, Pinnacle 1, and Pinnacle 2.
When partnering with Equifax for credit score reporting, lenders receive full disclosure on how each credit score is calculated and the differences between variations. While the exact calculation of the Pinnacle score is an Equifax company secret, as with other credit bureaus, payment history and delinquent accounts count most, while also considering the length of credit history, types of accounts used, and credit inquiries. While the exact methodology used to create the Pinnacle score is kept secret, the factors involved with nearly all credit scoring methodologies include the following: late payments, current debts, length of time an account has been open, types of credit, and new applications for credit. A higher credit score tells lenders or other entities that you are a favorable credit risk, while a low score may bar you from accessing credit or require higher interest rates.

Beacon (Pinnacle) Score

A credit event is a negative change in a borrower's capacity to meet its payments, which triggers settlement of a credit default swap (CDS) contract.

A credit event is a sudden and tangible (negative) change in a borrower's capacity to meet its payment obligations, which triggers a settlement under a credit default swap (CDS) contract. Moreover, CDSs do not have the underwriting and actuarial analysis of a typical insurance product; rather, they are based on the financial strength of the entity issuing the underlying asset (loan or bond).
Purchasing a CDS can be a hedge if the buyer is exposed to the underlying debt of the borrower; but because CDS contracts are traded, a third party could be betting that
1.  the chances of a credit event would increase, in which case the value of the CDS would rise; or
2.  a credit event will actually occur, which would lead to a profitable cash settlement.
If no credit event arises during the contract's term, the seller who receives the premium payments from the buyer would not need to settle the contract, and instead would benefit from receiving the premiums. A credit event is a sudden and tangible (negative) change in a borrower's capacity to meet its payment obligations, which triggers a settlement under a credit default swap (CDS) contract. The risk, then, is that the CDS seller would experience a default credit event at the same time as the CDS borrower. In a credit default swap, the buyer makes periodic payments to a seller for protection against credit events like default.

Credit Event

Credit muling is a type of credit fraud that involves acquiring or delivering items that were obtained using credit.

Credit muling is a type of credit fraud that involves acquiring or delivering items that were obtained using credit. These mules will use their good credit to borrow the product in question, such as by obtaining a phone on multi-year service contracts, in which the payment for the phone itself is incorporated into the monthly cost of the plan. In reality, the criminal’s intention is to simply resell the phone on the black market at an even higher price, leaving the unwitting consumer to deal with the monthly service charges, termination fees, and adverse effect on their credit score that will inevitably follow. Credit muling can be very difficult to detect, because the mules in question often use their real identities and good credit ratings to secure the borrowed goods. Once the consumer has obtained the phone, the criminal will purchase it from them at a price higher than the consumer initially paid—therefore offering the consumer a short-term “profit” or “fee” for the service.

Credit Muling

Taking steps to improve poor credit standing is called credit repair.

Credit repair is the process of fixing poor credit standing that may have deteriorated for a variety of different reasons. Individuals are entitled to free credit reports every 12 months from credit reporting agencies, as well as when an adverse action is taken against them, such as being denied credit based on information in the report.
Disputes may be filed when incomplete or inaccurate information appears on their credit reports. According to the Federal Trade Commission (FTC), credit repair firms can’t legally do anything for you that you can’t do for yourself.﻿﻿ You just have to be willing to spend the time reviewing your credit reports for negative or inaccurate information, reaching out to the credit bureaus to dispute that information, and following up on those disputes to make sure they’re being investigated. Aside from correcting such information, or catching fraudulent transactions on one’s credit, rebuilding and repairing credit can rest more heavily on credit usage and credit activity. Though numerous companies claim they can clean up bad credit reports, correcting erroneous information that may appear on credit reports takes time and effort.

Credit Repair

A credit review is a periodic assessment of an individual’s financial profile, often used to determine a potential borrower's credit risk.

A credit review—also known as account monitoring or account review inquiry—is a periodic assessment of an individual’s or businesses' credit profile. This history appears in your credit reports from the three main U.S. credit bureaus, Equifax, Experian, and TransUnion, which contain information from lenders that have extended you credit previously; including your payment history with each creditor and the credit limits or loan amounts associated with each creditor. The primary purpose of a credit review in the eyes of creditors is three-fold: 1) to determine if the potential borrower is a good credit risk; 2) examine a prospective borrower's credit history, and 3) reveal potentially negative data. Creditors—such as banks, financial services institutions, credit bureaus, settlement companies, and credit counselors—may conduct credit reviews. Not all employers use a credit report as a deciding factor for hiring, but in certain industries—banking, real estate, and financial services—your credit report can help or hurt your chances of getting a job or license.

Credit Review

Creditworthiness is how a lender determines that you will default on your debt obligations or how worthy you are to receive new credit.

Creditworthiness is how a lender determines that you will default on your debt obligations, or how worthy you are to receive new credit. You can request a free copy of your credit report once each year, or you can join a free credit monitoring site like Credit Karma or Credit Sesame (the latter being one of the best credit monitoring services currently available), which allows you to keep on track of your credit history. Lenders pay the credit reporting agencies to access credit data on potential or existing customers in addition to using their own credit scoring systems to grant approval for credit. Every consumer should keep track of their credit score because it is the factor financial institutions use to decide if an applicant is eligible for credit, preferred interest rates, and specific credit limits. If you don't feel confident selecting the option to automatically pay your credit card balance in full every month from your bank account, using a credit card is not for you.

Creditworthiness

A credit score is a number between 300–850 that depicts a consumer's creditworthiness. The higher the score, the better a borrower looks to potential lenders.

A credit score is a number between 300–850 that depicts a consumer's creditworthiness. The type of credit used counts for 10% of a credit score and shows if a person has a mix of installment credit, such as car loans or mortgage loans, and revolving credit, such as credit cards. While there can be differences in the information collected by the three credit bureaus, there are five main factors evaluated when calculating a credit score:
1.  Payment history
2.  Total amount owed
3.  Length of credit history
4.  Types of credit Work with one of the best credit repair companies: If you don't have the time to improve your credit score, credit repair companies will negotiate with your creditors and the three credit agencies on your behalf, in exchange for a monthly fee. One metric used in calculating a credit score is credit utilization or the percentage of available credit currently being used.

Credit Score: , Factors, & Improving It

A credit report is a detailed breakdown of an individual's credit history, provided by one of the three major credit bureaus.

Understanding Your Experian Credit Report

Understanding Your Equifax Credit Report and Credit History

A Summary of Your Rights Under the Fair Credit Reporting Act

Using consumer reports for credit decisions: what to know about adverse action and risk-based pricing notices

A credit report is a detailed breakdown of an individual's credit history prepared by a credit bureau. These reports also include a credit history summary such as the number and type of bank or credit card accounts that are past due or in good standing, and detailed account information related to high balances, credit limits, and the date accounts were opened. What had happened was that the client had the same name as their father, so when the credit report was run, it pulled their correct information, but also accidentally pulled their father’s credit card balance.
Make sure to check for errors before you think you will need to apply for credit so you can have them fixed if there are any. A client of mine was applying for a home mortgage, and when the bank pulled their credit report, there was over $20,000 of credit card debt on the report, but the client didn’t have any credit cards. A credit report is a detailed summary of an individual's credit history, prepared by a credit bureau.

Credit Report

Derogatory information is information that appears on a credit report which can be legally used to turn down a loan application.

15 U.S.C. Title 15, Chapter 41, Subchapter IV - Equal Credit Opportunity

Derogatory information is negative information on a person's credit report which can be used to turn down a loan application. Derogatory information in a credit history can significantly impact your credit score, and make it difficult to get new lines of credit, get approved for a loan, or qualify to rent an apartment. Though some lenders may still extend a line of credit to an individual with derogatory information on their credit report, it may include higher interest rates or fees.
It is vital to review your credit report and look for errors. Derogatory information can refer to a variety of items reported to the credit bureaus from credit card companies, lending institutions, and mortgage providers.​​​​​​​
Derogatory information is any reported negative credit information which can be used to deny an individual a loan. Derogatory information is negative information on a person's credit report which can be used to turn down a loan application. Derogatory information appearing on a credit report relates to only legal reasons to limit or deny credit.

Derogatory Information

The Fair Credit Reporting Act (FCRA) is the federal law regulating the collection of consumers' credit information and access to their credit reports.

The Fair Credit Reporting Act (FCRA) is a federal law that regulates the collection of consumers' credit information and access to their credit reports. Dispute—and have the bureau correct—information in their report that is incomplete or inaccurate, in an effort to repair their credit.
Remove outdated, negative information (after seven years in most cases, 10 in the case of bankruptcy).
If the credit bureau fails to respond to their request in a satisfactory manner, a consumer can file a complaint with the Federal Consumer Financial Protection Bureau (CFPB).
Say that somebody is looking to rent an apartment and the landlord denies their application, claiming it is because of their credit score. The Fair Credit Reporting Act (FCRA) is a federal law that regulates the collection of consumers' credit information and access to their credit reports. The FCRA also states that credit rating agencies must remove negative credit information after 7 years and bankruptcies after 7- 10 years (depending on the type of bankruptcy involved). The Fair Credit Reporting Act (FCRA), Public Law No. 91-508, was passed in 1970 by the U.S. Congress to promote accuracy, fairness, and the privacy of personal information found in credit reports.

Fair Credit Reporting Act (FCRA)

"FAKO Score” refers to any credit score that is not the “FICO Score” developed and sold by the credit scoring company, Fair Isaac Corporation (FICO).

The term “FAKO Score” refers to any credit score that is not the “FICO Score” developed and sold by the publicly traded credit scoring company, Fair Isaac Corporation (FICO). For example, the FICO scores take into account five factors when determining creditworthiness: the borrower's current level of indebtedness, their history of payments, the types of credit used, the length of the borrower’s credit history, and the number of new credit accounts for which the borrower has applied.﻿﻿ Because they are based on different calculation methodologies, consumers sometimes find FAKO scores confusing or misleading, preferring to rely on the traditional FICO score.
Today, there are many websites offering credit scores to the public. The term “FAKO Score” refers to any credit score that is not the “FICO Score” developed and sold by the publicly traded credit scoring company, Fair Isaac Corporation (FICO). Although there is nothing preventing new companies from creating their own type of credit score, the trouble arises from the fact that most consumers unconsciously determine whether a given score is “good” or “bad” by comparing it to the range popularized by the FICO score.

FAKO Score

FICO 8 is the most widely used version of the consumer credit-rating model developed by the Fair Isaac Corp.

FICO Score Education: Which FICO Score Version Matters to Me?

FICO 8 Credit Score Available at All Three National Credit Reporting Agencies

FICO Scores Versions: How is FICO Score 8 different from previous versions?

Which FICO Score Do Mortgage Lenders Use?

FICO Score 9 Introduces Refined Analysis of Medical Collections

FICO Score 9 Now Available to Consumers at myFICO.com

FICO Scores Versions: Industry-Specific FICO Scores

FICO Scores Versions: Introducing FICO Score 9 - the most predictive FICO Score to date

FICO 8 is the most widely used version of the standard model used to score consumers on their use of credit.﻿﻿﻿ The FICO score gets its name from the Fair Isaac Corporation (now called FICO), the California-based data analytics firm that in 1989 created the system for rating the use of credit and debt by individual consumers. As of this writing, Feb. 3, 2021, Investopedia could not confirm whether the scores had yet been rolled out.
There have been two successors to FICO 8: FICO 9, deployed in 2014 to lenders and in 2016 to consumers, and FICO 10 Suite, consisting of FICO 10 and FICO 10T, announced in January 2020.﻿﻿﻿﻿﻿﻿﻿﻿ However, major credit bureaus and lenders, not FICO, decide whether to adopt new versions and the timeline for doing so, which is why FICO 8 is currently still the most popular score. FICO 8 is the most widely used version of the standard model used to score consumers on their use of credit.﻿﻿﻿ The FICO score gets its name from the Fair Isaac Corporation (now called FICO), the California-based data analytics firm that in 1989 created the system for rating the use of credit and debt by individual consumers. To further complicate matters, FICO also offers a set of tailored, industry-specific scores for auto lenders, mortgage lenders, and bank card issuers, increasing the number of available scores.
FICO Score 9 featured adjustments to the treatment of medical collection accounts, increased sensitivity to rental history, and a more forgiving approach to fully paid third-party collections.﻿﻿﻿ FICO 10T takes trended data into account. Mortgage lenders use FICO 2, FICO 4, or FICO 5, for example, depending on which credit bureau they approach for information.

FICO 8

FICO, previously called Fair Isaac Corporation, is a software company best known for producing the most widely used consumer credit scores.

Fair Isaac Corporation 2020 Annual Report 10-K

What’s the Difference Between FICO Scores and Non-FICO Credit Scores?

FICO is a major data analytics software company that provides products and services to both businesses and consumers. Because FICO gives businesses a convenient way to assess consumers’ credit risk through FICO credit scoring, consumers have greater access to credit. Previously known as the Fair Isaac Corporation, the company changed its brand name to FICO in 2009 and is best known for producing the most widely used consumer credit scores that financial institutions rely on to decide whether to lend money or issue credit. The FICO score is so widely used and there is so little competition in the credit scoring industry that if the company becomes unable to provide credit scores, or if its scoring method were found to be significantly flawed, then there could be negative effects throughout the economy. For example, when FICO gives a consumer a credit score of 600, which is considered subprime, it is predicting that the customer is likely to have trouble repaying a loan based on the data it has on that consumer’s past repayment activity.

FICO

A FICO score is a type of credit score that makes up a substantial portion of the credit report lenders use to assess an applicant’s credit risk.

Frequently Asked Questions About FICO Scores

FICO scores are used in over 90% of U.S. lending decisions

FICO Score 9 Now Available to Consumers at myFICO.com

Table of Contents A FICO score is a credit score created by the Fair Isaac Corporation (FICO).﻿﻿ Lenders use borrowers’ FICO scores along with other details on borrowers’ credit reports to assess credit risk and determine whether to extend credit. Maxing out credit cards, paying late, and applying for new credit haphazardly are all things that lower FICO scores.﻿﻿ Additionally, given the role a good FICO score can play in so many credit decisions, it may also be worth investing in a good credit monitoring service to keep your information safe. In contrast, borrowers in the 580 to 669 range may find it difficult to obtain financing at attractive rates.﻿﻿ To determine creditworthiness, lenders take a borrower’s FICO score into account, but they also consider other details, such as income, how long the borrower has been at their job, and the type of credit requested.
FICO scores are used in more than 90% of the credit decisions made in the U.S.﻿﻿ FICO scores take into account data in five areas to determine creditworthiness: payment history, current level of indebtedness, types of credit used, length of credit history, and new credit accounts.

FICO Score

A furnisher is a company that provides information about a consumer, including credit history, to a credit bureau.

A furnisher is a company that provides information about a consumer, including credit history, to a credit bureau. These regulations cover a broad scope and include the methods used to collect consumer information, the sources of the information, and the accuracy of the information. A furnisher is a company that provides information about a consumer, including credit history, to a credit bureau. A consumer may directly dispute the information provided by a furnisher, if they believe that the information contained in a consumer report or relating to an account is inaccurate. Furnishers are typically organizations that provide financial services, such as banks and credit card companies, but may also include debt collection agencies and other companies that process financial information.

Furnisher

Good credit is a classification for an individual's credit history, indicating that the borrower has a relatively high credit score and is a safe credit risk. 

What Are the Different Credit Scoring Ranges?

How Long Do Late Payments Stay on Credit Reports?

Good credit is a classification for an individual's credit history, indicating the borrower has a relatively high credit score and is a safe credit risk. Other factors impacting credit scores include length of credit history, types of credit used, new credit lines issued, and recent credit inquiries. Good credit is a classification for an individual's credit history, indicating the borrower has a relatively high credit score and is a safe credit risk. Good credit is a classification for an individual's credit history, indicating the borrower has a relatively high credit score and is a safe credit risk. Therefore, borrowers with a credit score of approximately 670 or higher are considered to have a good credit score and the best chance of receiving credit approval from a lender.

Good Credit

Impaired credit occurs after a deterioration in the creditworthiness of an individual or entity. Discover more about impaired credit.

Impaired credit occurs when there has been a deterioration in the creditworthiness of an individual or entity. Impaired credit may require drastic changes to operations or procedures to alleviate financial stress--whether that involves paying off debts like credit card debt, or a company reducing expenses and selling assets. The highest credit score possible is 850, while generally an individual with a credit score between 670 and 739 is considered to have good credit. In the case of an individual, impaired credit may be the end result of a job loss, long illness, a steep decline in asset prices, a failure to pay their credit card bills on time, and a multitude of other reasons. This is usually reflected through a lower credit score, in the case of an individual, or a reduction in the credit rating assigned to an entity or debt issued by a rating agency or lender.

Impaired Credit

Negative information is data in a consumer’s credit report that lowers their credit score or makes them look like a higher risk to lenders.

How Long Does a Foreclosure Stay on Your Credit Report?

What Are the Different Types of Bankruptcy and How Is Each Considered by My FICO® Score?

Negative information is data in a consumer’s credit report that lowers their credit score. If you’ve opened too many new accounts recently, don’t have a mix of different types of credit, have a credit history that is very short, or use a large percentage of your available credit, your score will be lower than it could be if you had a long credit history, no or few new accounts, several different types of credit and a low credit utilization ratio. Foreclosures remain on your credit report for seven years, while completed chapter 7 and chapter 11 bankruptcies stay on your credit report for up to ten years, and chapter 13 bankruptcies stick around for up to seven years.﻿﻿﻿﻿ However, having other accounts in good standing will reduce the impact of negative items over time, even before they drop off your credit report. If your credit report contains negative information that’s a result of financial mistakes or hard times, a combination of positive items and the passage of time will improve your credit score. If your credit report contains negative information that’s false or inaccurate, you should contact the credit bureau and try to get the negative information removed.

Negative Information

Precision score is the former name of the so-called “NextGen Risk Score” developed by the credit scoring company, Fair Isaac Corporation (FICO).

The term “precision score” refers to the former name of the so-called “NextGen Risk Score” developed by the credit scoring company, Fair Isaac Corporation (FICO). Borrower’s history of payments
Borrower's current level of indebtedness
Length of time in which they have been a credit customer
Types of credit which they use
Number of times they have applied for new credit products
In general, the most heavily-weighted factors are the applicant’s history of payments followed by their level of current indebtedness. Today, the three major credit report companies are Experian, Equifax (EFX), and TransUnion; the most popular credit scoring formula is the so-called FICO scores, developed by Fair Isaac Corporation. The term “precision score” refers to the former name of the so-called “NextGen Risk Score” developed by the credit scoring company, Fair Isaac Corporation (FICO). By helping lenders quickly assess the creditworthiness of a particular borrower, credit scores can help reduce the time and risk associated with extending credit to new applicants.

Precision Score

A soft credit check is a credit report check that does not affect an individual’s credit score. Alternatively, a hard pull will hurt your credit score.

Hard vs. Soft Inquiries on Your Credit Report

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Table of Contents
What Is a Soft Credit Check? However, soft inquiries don’t impact your credit score because they are not a formal credit application, so credit bureaus don’t include them in their credit score calculations. Soft inquiries are inquiries that you either didn’t request or were made solely for informational purposes, while hard inquiries are the result of the credit application process.
If you’re concerned about the impact of hard inquiries on your credit score, don’t apply for any loans or credit you don’t need. Hard inquiries also occur when you apply for a mortgage, an auto loan, or any number of other activities that result in a credit decision for or against you.
Hard pulls can harm your credit score for a few months and may stay on your credit report for about two years. A soft inquiry—also called a “soft pull”—allows a creditor to review your credit report and credit score to get a sense of how well you are managing your credit.

Soft Credit Check

Subprime is a classification of borrowers with tarnished or limited credit history. Subprime loans carry higher credit risk, so higher interest rates.

Subprime is a below-average credit classification of borrowers with a tarnished or limited credit history, and which are subject to higher than average interest rates. It was assumed that there was safety in numbers and because so many thousands of loans were pooled together, it was thought that even if some of them defaulted, the mortgage pools would remain sound investments because of the false assumption that the majority of the borrowers would still pay their mortgage payments.
The thousands of loans made to people who could no longer afford to make the payments after their interest rates adjusted upward ended up defaulting, the pooled mortgage investments went under, and all of this helped to fuel the global financial crisis. In addition to credit cards, many subprime lenders also offer non-revolving loans, such as car loans, with interest rates in the range of 36%.
Payday lenders are another, more controversial, subprime credit alternative. Subprime is a below-average credit classification of borrowers with a tarnished or limited credit history, and which are subject to higher than average interest rates. In mortgage lending, subprime borrowers can relatively present less risk than in other types of unsecured subprime lending products because the mortgage itself is secured by the home as collateral.

Subprime

Consumers with super-prime credit are considered to have excellent credit and pose the least risk to lenders and creditors.

Super-prime credit is a credit score that is at the highest end of a credit bureau’s score range. A consumer’s credit score and classification as super-prime, prime, near-prime, or subprime can vary by credit bureau due to the different methods used by the bureaus to calculate credit scores. A consumer’s credit score and classification as super-prime, prime, near-prime, or subprime can vary by the credit bureau for two reasons. In markets where credit is tight, super-prime borrowers are more likely to retain access to credit than subprime, near-prime, and sometimes even prime borrowers. Consumers with super-prime credit have credit scores at the highest end of a credit bureau's score range.

Super-Prime Credit

Voluntary bankruptcy is a type of bankruptcy where an insolvent debtor brings the petition to a court to declare bankruptcy because the individual or entity is unable to pay off debts.

Voluntary bankruptcy is a type of bankruptcy where an insolvent debtor brings the petition to a court to declare bankruptcy because they are unable to pay off their debts. In addition to voluntary bankruptcy, other forms of bankruptcy exist, including involuntary bankruptcy, and technical bankruptcy. Voluntary bankruptcy is a type of bankruptcy where an insolvent debtor brings the petition to a court to declare bankruptcy because they are unable to pay off their debts. Filing for voluntary bankruptcy differs from filing for involuntary bankruptcy, which occurs when one or more creditors petitions a court to judge the debtor as insolvent (unable to pay). Voluntary bankruptcy is a bankruptcy proceeding that a debtor, who knows that they cannot satisfy the debt requirements of its creditors, initiates with a court.

Building Credit

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