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FICO vs. FAKO: How to Get Real FICO Credit Scores

FICO Credit Scores are used in over 90 percent of U.S. lending decisions. Credit Scores from sites like CreditKarma offer VantageScores which means your FICO Scores likely have more influence in your financial life.

FICO Credit Scores are used in over 90 percent of U.S. lending decisions. Credit Scores from sites like CreditKarma offer VantageScores which means your FICO Scores likely have more influence in your financial life.

There may be multiple credit scoring systems but there is only one FICO credit scoring system. The FICO score is the credit score most widely used by banks, lenders and creditors to make credit granting decisions.

When you check your credit score, especially for free, it’s highly likely that credit score IS NOT a FICO credit score. It is what many have come to refer to as a FAKO credit score.

Popular websites like Credit Karma and Credit Sesame offer free credit scores. In fact, there are over 26 different web sites that sell credit scores to consumers. But the only way to get the credit score used by 90% of top lenders is by purchasing FICO credit scores from myFICO.com. All FICO Score products made available on myFICO.com include a FICO Score 8, along with additional FICO Score versions like FICO Auto Scores, FICO Bankcard Scores and older versions of FICO’s main scoring model that may be currently used for mortgage loans.

Consumers are sometimes confused because they get one credit score from a free website but once a lender pulls their credit score it can be totally different. The discrepancy is due to the fact that credit scores come from different scoring systems. You may be surprised to know just how many different credit scores are sold or offered for free to consumers – most of which are never used by lenders.

Bottom line is that lenders will look at your FICO score first and foremost as it’s one of the most consistent scoring models, even though the VantageScore is making inroads. According to VantageScore, more than 6 billion VantageScore credit scores were used in 2015. The VantageScore credit score, developed by VantageScore Solutions, has been on the market for lenders to use since 2006.

But to put things in perspective, according to FICO’s website, their scoring models are used by more than 90 percent of the largest lenders. So who is actually using VantageScore? At this point that’s difficult to say. But in Dec. 2015, House Resolution 4211 was introduced in Congress to allow Fannie Mae and Freddie Mac to use alternate credit scoring methods when making mortgage decisions. If the bill is passed, it might result in the programs adopting VantageScore which would definitely put VantageScore on the map.

TransUnion FICO Scores

Let’s say you go directly to the Transunion website to purchase your score; well this is not the FICO score used by lenders. It is a TransUnion consumer version of your credit score. This may be shocking to you but TransUnion is not selling you the scores used by lenders. TransUnion stopped selling the FICO score in 2009. In order to get a TransUnion FICO score you must purchase it at myFICO.com; or, if you are denied credit and the lender used TransUnion, they can give you the credit score.

Experian FICO Scores

Experian began offering a FICO score in Dec. 2014 as part of a credit-monitoring service. Today you can get your Experian Report and FICO Score for $1. The FICO score consumers will receive will be based on the information in their credit report with Experian. The company will also alert subscribers to activity such as attempts to open accounts in their name, provide help if they become victims of identity theft as well as scan the dark web to see if your SSN, email or phone number have been compromised. The scan looks back to 2006, including thousands of sites and millions of data points.

Equifax FICO Scores

If you want your Equifax FICO credit score you have to purchase the Equifax Score Power product only because they also sell their own consumer version of credit scores. myFICO.com also produces the real Equifax FICO score for a price.

Why FICO Scores matter most

Many credit scores exist and are sold or given free to consumers. But FICO scores matter most because they are used in the majority of consumer-lending decisions. When you know your FICO score, you have a better idea of whether you’ll get approved for a mortgage or auto loan, as well as any other credit product. You’ll also know what interest rate to expect if you get approved. Even a small difference in a score can mean a higher or lower interest rate on a new loan.

At myFICO.com the FICO scores are based on a consumer’s information directly from their credit reports from all of the three major credit-reporting companies: Equifax, Experian and TransUnion. myFICO.com, has been selling its scores to consumers for several years. Consumers can pay $19.95 for a FICO score and credit report from any one of the three credit bureaus.

But keep in mind, even when you purchase your FICO score at myFICO.com, it may not be the actual one lenders use, it could just be a generic score. Some lenders use specialized FICO scores. For instance, mortgage lenders have a mortgage score that predicts the likelihood that you’ll repay a mortgage. Similarly, auto lenders have a specialized auto FICO score. The “proprietary scores” used by some lenders rank you based on your credit history along with other factors like, income, expenses, amount of debt. Borrowers have no access to proprietary credit scores.

FAKO Scores – (CreditKarma)

FAKO scores offered by websites such as Credit Karma and Credit Sesame are still useful. I am going to stop referring to the VantageScore as FAKO since more lenders are now using it to make credit decisions. CreditKarma offers scores based on the VantageScore 3.0 scoring model, ranging from 300 to 850. The scores are calculated by TransUnion and Equifax. Credit Sesame uses data in a consumer’s Experian credit history to calculate a score called Experian’s National Equivalency Score.

The good news is that credit scores not calculated by FICO can still be useful when you are rebuilding credit. Plus you gain access to current information in your credit files. Payment history and credit utilization and other helpful information is available with CreditKarma, all of which are part of your real FICO score. As long as you focus on having the most positive information – timely payments and low credit utilization – FAKO scores can be relevant!

What consumers using CreditKarma Vantgage credit scores should watch out for. Credit Karma makes recommendations for credit products based on your credit scores generated by their scoring models. In some instances consumers may have different, often higher FICO scores than the scores offered by Credit Karma. It’s a possibility that users of Credit Karma with lower credit scores are applying for credit products that don’t reflect their true credit scores. They may be able to qualify for better credit products with lower interest rates and better terms. Just beware before you apply for Credit Karma’s recommended products based on their Vantage credit scores.

What the VantageScore credit score can do is score thin file consumers more accurately by providing predicative scores for consumers with limited histories. VantageScore 3.0 is the most current version and looks back 24 months at a person’s credit history, a feature that allows it to score more people who have little or no recent credit history.

This is good news for consumers with thin files and consumers who may have prior negative actions against them but have a good recent history.

Credit Scoring Hell

With all the different credit scoring systems you may think you’ve entered credit scoring hell, but take a deep breath — it’s going to be okay. While true FICO scores may only be available through myFICO.com, Equifax, Experian or directly from the lender, these other credit scores remain helpful and can give you an idea of where you stand. If you are unsure when purchasing real FICO scores, remember that FICO scores will always say “FICO” when describing the score.

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