Most consumers purchase their credit scores online so they can better manage their credit. Plus, there is the convenience of being able to make the purchase in just a matter of minutes. At the click of a button, a person can have a score, a report, and access to a number of services that they use to help them improve their creditworthiness in a world where everything relies upon credit. In just a few minutes, a person can dispute something that they feel should not be on their report and at any time can be alerted of any changes to protect themselves against identity thieves.

But are these services truly the best way to manage credit?

The fact is that one out of five consumers that are purchasing their credit scores online receive different scores than what lenders see. The Consumer Financial Protection Bureau (CFPB) conducted a study that showed this could result in individuals receiving loan terms that are much different than what they expect to receive when they walk into the bank looking for a loan.

Another issue is that consumers look at these online scores and they apply for loans and other lines of credit that they do not qualify for. This causes their credit reports to be hit with inquiries that can have a negative impact on their actual credit scores. Instead of taking a step forward, a negative inquiry can take a person two steps back.


Nonetheless, moving backward is not what an individual is trying to achieve by using these online services. When a person buys their credit score through an online service, they want to better themselves, but what they are most likely presented with is a FAKO score. This is not the FICO score that lenders look at.

The FICO score is the most well-known and it is the branded score. Usually when the word “credit score” is used, it is referring to the FICO score, but the term tends to be generically used to describe any number of credit scores a person may receive.

As for the primary difference, FICO is calculated by a mathematical formula that covers five areas:

  • Payment History (35%)
  • Amounts Owed (30%)
  • Length of Credit History (15%)
  • Types of Credit Used (10%)
  • New Credit (10%)

This score ranges between 300 and 850. What a person wants is a score above 650 because that displays creditworthiness. A score below 620 makes it more difficult to acquire loans and other credit at reasonable rates.

Unfortunately, a FAKO score can show a higher score than a person’s FICO because it does not use the same mathematical formula. The FICO formula that was created by Fair Isaac is proprietary, which means it is secret. This is why the FAKO can sometimes be very far off from what a lender sees. Other times, the FAKO can be quite close to the FICO. The credit score acquisition service that is used can also make a difference. While FICO has a minimum score of 300, a particular service may not display anything below 360.

Is FAKO Completely Useless?

Because of this vast difference between the two, this brings about the concern of whether or not FAKO is totally useless when managing credit. While it has caused consumers to have a number of issues with their credit scores, it all comes down to not taking it so seriously. The FAKO credit score is more of an “educational score” that gives a person an idea of where their credit stands. It should not be taken to heart.

Those that take their FAKO score to heart are those that believe they can apply for that credit card that requires an excellent score. What happens is they receive a denial letter through the mail that tells them that their creditworthiness didn’t meet the standard. Not only does this cause a great deal of confusion, but they may call the creditor to ask them why they were denied with an excellent score. It is when they contact the credit bureau that they find out that they wasted their time applying for the card, caused there to be an unnecessary inquiry on their credit report, got upset when they wouldn’t have otherwise, and even made unnecessary contact with the credit card company.

The FAKO Advantage

Fortunately, there is one advantage that consumers may experience when acquiring a FAKO score through one of the services that provide it and that is the fact you can usually see what is on your credit report. This allows you to contact the credit bureaus and dispute anything that should not be there. You can also get an idea of how to improve your credit, such as paying off accounts to lower the amount of debt that you have so that your debt-to-income ratio improves. An improvement in debt-to-income ratio can improve creditworthiness.

Some services also have credit-monitoring services. This can be useful for when someone steals financial information and starts opening credit accounts. Unfortunately, many do not know their identities have been stolen in this way until they apply for credit and cannot get it due to delinquent accounts they never opened. With credit-monitoring, a person is immediately notified of a change on their credit report.

Resolving The Credit Score Confusion

As for all of this confusion when it comes to the vast differences in credit scores,  one way to resolve it is to simply acquire the scores straight from the credit bureaus. TransUnion, Equifax, and Experian are the three bureaus whose scores you should be concerned with. However, some of the credit score services use TransUnion scores and TransUnion tends to be higher than Equifax and Experian due to not every creditor reporting to them. Because of this, some lenders will lean heavily upon the lowest score or the two lowest scores. That is why when working to improve your creditworthiness, you need to focus on raising your lowest score over 650 so you can receive that credit card at a great rate or a mortgage loan with the best possible terms. When that score raises, the others go up as well. Even the FAKO score will rise, but, again, it is not the score that you can rely on.

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