What Is an Enhanced Beacon Score?
Credit scores are used by lenders to predict how likely you are to repay extended credit or loans based on your history of credit management. There are many models for creating credit scores, one of which is Equifax's Auto Enhanced Beacon Score.
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Significance
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All credit scoring agencies use a different model to generate credit scores that they believe accurately reflect consumers' credit risk or worthiness. The Beacon Score is commonly used by major lenders. However, the Beacon Score and the Enhanced Beacon Score are slightly different, even though both are generated by the same credit bureau.
Usage
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The Enhanced Beacon Score, also referred to as the Auto Enhanced Beacon Score or the Auto Industry Option Beacon Score, is usually used by new and used car sales companies that extend car loans to consumers. Other types of lenders typically use different scores based on different scoring models.
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Reason
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An Enhanced Beacon Score is different than other types of credit scores because it places added weight on your credit history as it relates to car buying. That means that a repossession may weigh more heavily on your Enhanced Beacon Score than it would on any other credit score. This is why, according to the American Chronicle website, most auto lenders rely on this score instead of other, more widely known types of credit scores.
Effects
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Your Auto Enhanced Beacon Score may be significantly higher than your other credit scores if you've made late payments on credit cards or defaulted on other loans but have had a perfect repayment history with past auto loans. On the other hand, if your credit is nearly spotless but the few bumps in your credit history road have been related to auto loans, you may be in for a nasty surprise. And it will be a surprise, because as the American Chronicle article states, only lenders can access these credit scores, so you can't look up your own Enhanced Beacon Score prior to going to the dealership.
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References
- Photo Credit Luxury Car sportscar from my luxury car series image by alma_sacra from Fotolia.com
