IMO, they are worthless, and here's my reasoning:
1) FAKOs, depending on the FAKO flavor, all have different score ranges. FICO is generally 300-850. But TransRisk (via CreditKarma and some TC-resells) is roughly 350-850. Vantage (from CreditKarma) is 501-990. PLUS (via freecreditreport, USAA's svc, and others) is 330-830. A CE Score (via Quizzle) and CreditXpert (via PrivacyGuard, and others) are 350-850. And there are many other scores. Because of the different ranges, you can't assume that if a FAKO increases by 10 points, your FICO would too. The point spread between FICO is roughly 550. For FAKOs, 500 and 489 for the examples given. 1 point for FICO is not the same as 1 point for a FAKO.
2) FAKOs include stuff the FICO does not and vice-versa in the realm of inquiries. For example, under most FAKOs, inquiries are score for 2 full years (true for PLUS, TransRisk at the least). But per FICO, they are scored for only 1 year. Also, FICO ignores certain inquiries like employment inquiries. FAKOs do not. And FICO will dupe together auto and mortgage inquiries if pulled within a certain time frame and FAKOs do not. Also FICO will not score any mortgage or auto inquiry while inside that duplication window. This is why you'll never see a score change immediately when you apply for a home or car. FICO ignores the inquiry. FAKO does not. So, if you see your FAKO drop 10 points due to an inquiry, never assume the same would happen to FICO.
3) FAKOs will not score all of your CCs. FAKOs, like Vantage, will ignore ALL AU accounts. You'll never see a score boost on CreditKarma via their Vantage when adding an AU. Vantage specifically ignores them to compete with FICO. Many lenders have complained about piggybacking and Vantage ignores AU for that purpose. FICO still scores them which is a good thing for those folks like stay-at-home spouses who piggyback off the other.
4) Some FAKOs calculate CC utilization differently. FICO looks at your balances in relation to your CLs. Some FAKOs do the opposite. They calculate off the available credit vs. the credit used. If you look at some CMSs out there, and read the advice, some like PLUS will ding you for not having enough available credit. In other words, it is a negative in their eyes to have low limit CCs. FICO doesn't care what your limit is. Someone with $100 in balances on $1,000 in CLs is equal to someone with $1000 on $10,000 in CLs. At least one FAKO will score the person with the $10k in CLs better than the one with $1k in CLs. FICO sees the two as equals.
5) Some FAKOs, specifically TransRisk at the least, will score your AAoA, but they will calculate AAoA on open accounts only. This is evident on CreditKarma. FICO calculates AAoA on ALL OC accounts, whether they are opened or closed, good or bad. Some take away the history calculation for FAKOs as meaning that old accounts don't help or count since they are removed from scoring for a FAKO. If those that rely on FICO followed that advice, you'd have some dropped scores if they decided to remove those old accounts.
6) Under some FAKO scoring, collections (CAs) are factored into your length of history. I remeber removing a CA once and my FAKO (I think PLUS at the time) decreased 8 points and my corresponding FICO increased 58 points. Opposite directions for the same event.
7) Have you guys seen the FICO pie chart in determining what goes into your score (35% for payment history, 30% amounts owed, 15% length of history, 10% new credit, and 10% credit mix)? FAKOs' pie charts are totally different. Using VantageScore as an example, Vantage's chart is 32% for payment history, utilization at 25%, 15% for balances, 13% for depth of credit, 10% for recent credit, and available credit at 7%. Basically that's a combined 25% for util and balances for FICO's 30%. Paying down your balances will not have as big of an impact on Vantage as it does with FICO. So, if your FICO increases 50 points due to util, your Vantage will do much less.
8) Combined with the above, FAKOs will often move in opposite directions as your FICO when compared the same day for the same event. If you were to pull your FICO and a corresponding FAKO on the same day, you'll find that over time one will go up and the other down. They'll also react differently for the same event. Assuming they did move in the same direction, there'll often be a large gaps in scores because one will outpace the other. For example, both my TU FICO (TU98) and Vantage are moving in the same direction as my util drops. However, there are times my Vantage is higher than my FICO and other times my FICO is higher than Vantage. I have one FAKO right now (CC-enhanced TransRisk as found via Junny) that is about 150 points lower than my FICO when compared the same day. There were times it was 250 points off. You cannot correlate a FICO with a FAKO.
9) Not every FAKO updates daily when pulled. PLUS score is notoroious for this. This gives a false sense of security when you know your FICO changed and your FAKO didn't do anything.
10) Nobody uses a FAKO score. Both TransRisk and PLUS give the disclaimer that the scores are for "educational purposes only" and one of the two, I can't remember who, clearly states that no lender uses their score. The only FAKO that is in use is Vantage but I cannot name a single lender that uses them. I know it's out there though. Nobody uses them because they are unreliable and a terrible predictor of risk.
11) Finally, because FAKOs have different ranges, and the items used to calculate the score differ, the advice that is paired with some of these FAKOs and found on many CMSs are just plain bad advice. They are giving you advice that works for a FAKO but if the same advice is taken, your score can move in the opposite direction. There's no reliability when compared to FICO.
I went a tad long I suppose. In summary, IMO, it's OK to track a FAKO (I do), but don't rely on it as fact. Just because a FAKO increased 50, that doesn't mean your FICO did the same. It can easy go in the opposite direction for the same event. And certainly don't cancel services with companies that provide FAKOs. Sometimes the report data is available and that will aid in the realm of credit.
