What's my beacon score and why is it important?
So what's a beacon score? Stated simply, a beacon score is Equifax's way of giving you a snapshot of your current credit situation. This score, which ranges from 300 to 900, helps lenders determine your 5 'C's of credit worithiness. They are:
1. Character: Will you pay the loan back?
2. Captial: Can you afford to pay the loan?
3. Collateral: What security is there in case of non-payment?
4. Credit: What's your debt history?
5. Capacity: Are you capable of paying back the loan?
Naturally, the higher your beacon score, the better credit worthiness you have. A beacon score of above 650 is considered better than average, and is the cutoff for many of the major banks and lending instituions. If your score is below 650, they simply won't lend to you.
A beacon score over 700 is ideal. You'll qualify for lower rates and better mortgage products. You're also allowed to dedicate a slightly higher percentage of your income towards your house payment. This will let you qualify for a slightly higher mortgage than someone who is below 700.
Stay tuned for part 2, coming soon!
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