An Experian FAKO tutorial...

[Anonymous]

Although I have a Chapter 13 discharge just inside 2 years ago on my credit history (and new mortgage and car loan since), I was still surprised yesterday to find that my Experian FAKO (as most know, you can't buy a real FICO for Experian, either here or anywhere else -- your only source is a potential lender) is a lowly 599. The surprise mostly is because my official Equifax FICO is currently 640 (I didn't buy TU, which was 643 the last time I knew). Even more surprising, though, was that Experian's own FAKO estimator tops me out at 654, even with me 'perfecting' my credit record.

According to Experian, only two items in my current record can improve my score: the number of recent (within 2 years) inquiries (currently 6), and my credit usage percentage (currently 53%). According to Experian, here's where I can gain points:

• Allowing my recorded inquiries to fall to 4 gets me nine points; I gain no more till I get to 0, which nets me 27 more; thus, I can gain 36 points by not suffering another hard pull until all the current ones disappear. (By the way, more won't hurt my score, though it will put me further away from helping it with reduced inquires alone.)
• Getting my credit usage to 50% earns me six points; getting it under 30% nets me 31 points total; and reducing it to 15% or lower gets me to 633.
• Doing both the items described above would get me to 654. Experian says I can't get higher, even by reducing my credit lines.

With Experian's reported, proprietary current and potential top credit scores considerably lower than true TU and Equifax FICOs, I can't help but wonder if they don't use them simply to drum up clients for their  credit-recovery business; or have others of you found that Experian is consistently lower than the other CRAs?

Not complaining about anything here -- the scores are what they be -- but just wondered what experiences others might have had with the 'mysterious' Experian credit scores.

[Anonymous]

Hi oldhack 62,

I have to preface this by saying that I never understand why folks want to use myFICO to discuss FAKOs.

For comparison purposes:  My CH 13 BK was discharged 2/09 - so over a year and a half ago.  Pretty close to your timing.

My Experian FICO was 723 on its last pull, on the same day my EXP was 762 from one FAKO source and 684 from another FAKO source.

FAKO's work with different algorithms; Ignore their scores, ignore their advice, ignore their predictions and estimators.  Work on your FICO's and make sure your reports are accurate - that'll give you the best bang for your buck - both the time you're spending "buck" and the cash you're spending "buck".

It is virtually useless to try to figure out how to gain FAKO points.  Your lenders use FICO - be familiar with the FICO scores that are available to you and become acquainted with the FICO reason codes.  That'll  help you out in a very real way.

Best wishes to you.

[RobertEG]

i will throw my two cents in.

I personally dont like the term FAKO, as it somehow implies a fake score.  I prefer the use of the terms FICO and non-FICO scores,

Fair Isaac had a virtual monopoly on credit scoring until a little over a decade ago.  They were the first to produce them.  They became the market standard, and still are to this day.  So, yes, I would agree to concentrate on your FICO score, as that is what lendors use.

I will use the anology of U.S. autos.  Until around 30 years ago, the only perception of "real" cars were U.S.cars.  Puny Japaanese cars came onto the market, and were laughed at.

FAKO cars, in the minds of most U.S. consumers.  They werent "fake" cars, just not the standard of perceived consumer excellence.  But capitalism changed the perspective, and thus the perception of consumers as to the value of each.  I kinow of no independent evaluation of FICO vs. non-FICO scoring that shows that either is superior in their task of better prediction of consumer risk analysis.  But the bottom line is that creditors perceive, and use, FICO scores as their preferred risk analysis tool.

It is not fair, in my mind, to caste dispersions at those who develop and attempt to market alternative scoring scoring algorithms.  Competion is a part of capitalism.

[Anonymous]

Thanks Robert.

No dispersions here.

Checking our common abbreviations, you'll find that FAKO is a term commonly used on these boards.  It reads, "FAKO = Generic credit score, not a true FICO."

I could go back and change my post and replace "FAKO" with "Generic credit score, not a true FICO".  But the reason we use abbreviations on these forums is for the convenience and ease of the poster and the reader.

Just thinking way back - when I learned to drive (much more than 30 years ago - yikes!!!!) my family owned a not very American Jaguar. a not very American Peugeot, and a not very American Renault.  No one ever referred to any of them as fake cars.  They were foreign cars.  And FAKO refers to generic credit scores which are not true FICO's.

I think it's important, perhaps most especially for newbies--but for all of us, to make distinctions between FICO scores and FAKO scores.  And I think we should clearly define the difference.  Confusing (or simply not differentiating between) the FICO's and FAKO's causes issues when attempting to follow FAKO advice which can be, (and often is) contrary to advice which would build a FICO score. 

Back to cars, it's like when I teach my son to drive a car with ABS and without ABS.  If he follows my ABS driving directions, they can cause harm when used while driving a vehicle with standard brakes.  Trying to manipulate FAKO scores, or following FAKO advice, can cause harm to FICO scores.

Checking out the home page of myfico.com, we learn that:

FICO scores are the factor used to determine your mortgage rates, car loans and credit card terms, and that

90% of the largest banks use your FICO score for credit decisions

The same is not true of FAKO's.  Thus, it is important to differentiate between FICO scores and FAKO scores - perhaps most especially on this website which is designed to provide information and share knowledge on FICO scores.

[vanillabean]

If "FAKO" is an abbreviation, I don't know what it's an abbreviation for. Certainly not "Generic credit score, not a true FICO"!

"FICO" is obviously an abbreviation however. I can only assume the FAKO word was picked to view the two as a bing bang, click clack, ping pong, Hewey, Dewey & Lewey couple.

But why FAKO and not FACO, if not for the association to the word "fake"? I'm not entirely comfortable with it.

What constitutes fake? That it's not a FICO, or that it's not used by most lenders? TU 04, like EX, is not generally available to us.

[Anonymous]

Sorry OP!  It looks like we're doing a good job of hijacking here. 

I suppose we could hijack OP's post and subject line to focus instead on commonly used terminology on the board. 

Perhaps a new thread could be started for that purpose! 

[Anonymous]

My point never was to compare FICO and non-FICO (FAKO?) scores -- I used the Experian score because it's the only one I have for them, not being able to purchase a legitimate FICO for that agency, and not currently applying for credit (I'd simply done my semi-annual CRA check). I was just wondering aloud if Experian really is that much lower-scoring than the other CRAs, or if this was some sort of automatic 'alarm bell' Experian might be throwing at me in order to prompt me to purchase some other (e.g., credit repair) product.

The most interesting 'facts', to me, were that via Experian's published score estimator, there is little I could do to raise it much beyond where my current FICOs already reside from the other CRAs, and that changes in 4 of the 6 categories -- credit-usage %,  inquiries, open installment loans, negative public records, current delinquencies, mortgage/no mortgage -- either are impossible or don't affect the score.

[vanillabean]

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@Anonymous wrote:

I was just wondering aloud if Experian really is that much lower-scoring than the other CRAs

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I can tell you my EX FICO story, which is based on the scores from a mortgage loan and two refinances.

The first two of these three times, my EX was like my EQ, which was 25 points lower than my TU, because TU includes an aged account that the other two don't.

The third time, a few weeks ago, my EX was like my TU, which was 15 points lower than my EQ, because a card not reporting its credit limit appeared maxed out.

My conclusion, which addresses your concern directly, is that EX does not appear to be outside of the range of the other two, while each of those two did so at other times.

My own concern recently was EX potentially playing the pivotal role of middle score for the mortgage rate. Fortunately even my lowest score of the three was good enough.

There may or may not be situations when the EX is the highest or the lowest by a significant number of points, but that's outside the scope of my experience.

I should add that my TU 04 was 10 points higher than my TU 98, which is a further indication that EX is not likely to present major mood swings compared to the other two.

Sometimes loan underwriting may pull the three scores just before they close to make sure your credit status isn't viewed as more of a risk than before.

It's my hope they do, because my credit reports are better then. If EX unexpectedly is outside of the range of the other two, I'll try to remember to let you know.