The term “Equifax credit score” means only that it based on your credit file retained by, in this case, the credit reporting agency, Equifax.
Only the CRAs maintain the data necessary to calculate your credit score, so they thus become the party that provides your scoring.
When you request a credit score based on your current credit file, the CRA must first determine what scoring algorithm to use.
The first company to produce and offer “credit scores” was Fair Isaac, back in the 1980’s.
Creditors began to rely upon a consumer’s payment risk analysis score, commonly referred to as your FICO score, as part of their credit granting process. With two decades of industry use, FICO became the only payment risk analysis available to creditors until around 2000.
When consumers began to recognize the significance of their credit score, and were permitted to obtain credit scores, the CRAs saw the opportunity to enter into competition with Fair Isaac, and develop and market their own scoring algorithms. There initial effort was as joint venture by the three major CRAs to develop an independent scoring algorithm, which was marketed as a “Vantage” score. Since the Fair Isaac scoring algorithm was, and is, a protected, proprietary trade secret, their algorithms used their own, independent view of risk analysis. Their view of credit scoring may be superior or inferior to the FICO view. Regardless, the fact remains, to this day, that creditors have used FICO scoring for about a quarter of a century, So that is the payment risk analysis score that most creditors rely on, and use. It has become, through credibility, the industry standard that most creditors rely on, and use.
Any score not based on the proprietary FICO algorithm is derogatorily referred to as a “FAKO” score.
OK, you submit a request for a credit score based on each CRAs database of your credit file. Unless your submission is for a score generated by the Fair Isaac (FICO) algorithms, the CRA will most likely provide you a FAKO score. Any score you order on the myFICO site is sanctioned to have been generated under the industry-standard FICO algorithms. It will include the proprietary “FICO” trademark.
Requests for a FICO score are not handled by Fair Isaac. They don’t have the CRA consumer data necessary to do this. What Fair Isaac does is to license their algorithms to each CRA. They are encrypted, so the CRA just puts their data in, and gets a FICO score.
For each score they provide using the licensed FICO algorithms, they pay a cross-licensing fee back to Fair Isaac.
Of course, if the request does not require use of the FICO algorithms, they will give you a FAKO score, and thus avoid the fee back to Father FICO.
