Valued Contributor
Posts: 1,168
Registered: ‎07-18-2009
CFPB released a report comparing FAKOs, FICOs, and VantageScore

For the geeks amongst us, the CFPB published the first seriouis comparison of FAKOs and FICOs.


There's a lot of good info in this report for those interested in FAKO/FICO correlations as well as FICO to FICO correlations. They studied a really large sample of credit scores.


Generally, FAKO's correlation coef was approx .92 with FICOs. Interestingly, VantageScore (v 1.0) correlated somewhat less even though it is a validated credit score with published statistics. This is somewhat surprising since FAKOs are generally "educational scores" not used by lenders and they haven't gone through the processes needed to be accepted by lenders.


Perhaps one of the more useful tidbits is that CC industry specific FICOs correlate at .99 to generic FICOs so you can pretty much bet that the generic FICOs availalble here are useful approximations for CC specific ones.


One caveat. There was no attempt to determine how well any of the scores actually predicted default risk, their purported goal. One can't tell much about the efficacy of the various scores from the study.


Also, the study normalized all scores into a rank ordering percentile so as to compare apples to apples since the scores have different ranges and distributions. Most have a long tail on the high risk side. VantageScore being the exception which is fairly evenly distributed.


Another interesting thing is that the correlation is higher for low risk scores so FAKOs, to the extent they can be used as rough proxies for FICOs, are better at the higher score levels than they are for folks with impaired credit.


Anecdotally, I've had score variations between FICO and Score Plus, which was studied, that was about 4 standard deviations outside of their published distributions, which reminds me that YMMV too!


I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

WM Discover $1800, WF Plat 12k, Chase Freedom Siggy18k, Amex Plat (60k H/B), Citi AA EWMC 25k