DEFINITION of 'FAKO Score'

A derogatory term for a credit score that is not one of the FICO scores lenders pull when deciding whether to approve a loan application or extend credit. FAKO scores are also called “equivalency scores” or “educational scores” and are usually provided by free online credit scoring services. A FAKO score might give a prospective borrower a general idea of where they stand with lenders but may not be accurate enough to tell them whether they will get approved.

BREAKING DOWN 'FAKO Score'

FAKO scores sometimes differ from FICO scores in their range of possible credit scores. A FAKO score might have a range of 360 to 840, while a FICO score has a range of 300 to 850. The vast majority of lenders use FICO scores, but a small percentage use the VantageScore, which weights the items in consumers’ credit reports somewhat differently but also has a score range of 300 to 850, like a FICO score.

Even knowing the exact credit score a lender would use if you applied for a loan will not tell you whether you will be approved if you apply because lending decisions also depend on factors such as how much someone is asking to borrow, collateral (if any), income and other debts.

Lenders typically use credit scores from Experian, Equifax or TransUnion, the three major credit reporting agencies. Each of these agencies calculates a consumer’s credit score differently depending on what is in the consumer’s credit file with that agency. On top of that, each agency might calculate a consumer’s credit score in a number of different ways depending on the type of loan the consumer is applying for. A consumer could have a different credit score with the same agency depending on whether he or she is applying for a credit card, an auto loan or a mortgage, or even starting a new service with the electric company. The only way to know the exact credit score a lender bases its decision on is to apply for the loan, but you shouldn’t apply for a loan or credit card you don’t need just to see your credit score.

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