What Is a FAKO Score?

The term “FAKO Score” refers to any credit score that is not the “FICO Score” developed and sold by the publicly traded credit scoring company, Fair Isaac Corporation (FICO).

Over the years, various websites have created and popularized credit scores that are intended to resemble the FICO score, but which can differ from it in significant respects. Commentators sometimes use the term “FAKO score” to refer to these non-FICO scores in a derogatory fashion.

Key Takeaways

  • "FAKO score" is a derogatory term used to refer to credit scores other than the FICO score.
  • Today, the two most popular examples are those of Credit Sesame and Credit Karma.
  • Because they are based on different calculation methodologies, consumers sometimes find FAKO scores confusing or misleading, preferring to rely on the traditional FICO score.

How FAKO Scores Work

Today, there are many websites offering credit scores to the public. Although there is nothing preventing new companies from creating their own type of credit score, the trouble arises from the fact that most consumers unconsciously determine whether a given score is “good” or “bad” by comparing it to the range popularized by the FICO score. This range, which spans from a low of 300 to a high of 850, has become so ingrained in public consciousness that FAKO scores might mislead consumers into believing that their creditworthiness is better or worse than it actually is. This has led some consumers to dismiss non-FICO credit scores as “FAKO scores,” short for “fake FICO scores."

Ultimately, credit scores rely on the credit reports put forward by the three major credit reporting agencies: Experian, Equifax (EFX), and TransUnion (TRU). However, score providers can differ substantially in regard to how they combine the information from these credit reports into one comprehensive score. For example, the FICO scores take into account five factors when determining creditworthiness: the borrower's current level of indebtedness, their history of payments, the types of credit used, the length of the borrower’s credit history, and the number of new credit accounts for which the borrower has applied. Although credit scores are ultimately based on the same types of information, they weigh these factors in different proportions and can therefore arrive at materially different conclusions.

Credit scores are a subject of considerable interest because of the central role they play in determining whether a given credit application is declined or approved. Generally speaking, FICO scores of 650 or greater indicate a very strong credit history and carry a high probability of new loan acceptance. Scores below 620, on the other hand, may make it difficult for borrowers to obtain financing at favorable rates. Unfortunately, the different calculation methods used by credit score providers can make it difficult for consumers to accurately predict whether they will qualify for loans. Even FAKO scores that use the same 300-to-850 scale as FICO may not implement the same categories for determining a borrower's credit score or apply the same weights to those categories as FICO.

Real-World Example of a FAKO Score

Currently, the two most popular FAKO scores are those of Credit Sesame and Credit Karma, both of which are private financial technology companies based in San Francisco, California. Both of these companies allow customers to estimate their current credit score using their own proprietary models. Because these models differ from those used by the Fair Isaac Corporation, the results from these tools will always differ slightly from those of the FICO score.

Prior to 2018, a third popular FAKO provider was Quizzle, a personal finance website based out of Detroit, Michigan. However, Quizzle’s services have since been closed down and incorporated into the offerings of its New York-based parent company, Bankrate.