Understanding The Credit Score Lingos – Credit Score v/s FICO Score v/s FAKO Score

When you begin to read articles or news on a credit site or a website related to personal finance, you are bound to see many words that confuse you. Credit score lingo is very confusing for common people. Terms such as FICO score or FAKO score can leave you feeling at sea with no understanding of what is being talked about. The lingo has been simplified and explained here in terms of a layman and you can increase your understanding about these terms.

Credit Score

If you have been reviewing your credit report, you would have noticed that three digit number at the top of your report. This number, also known as Credit Score, tells the story about your credit report at a glance. It is calculated on the basis of the information available in your credit report. All the three major bureaus have their own way of calculating it. Of the many companies that sell credit score, Equifax uses PLUS, TransUnion uses EMPIRICA and Experian uses BEACON. Another very popular score is the Vantage Score that has been developed by the bureaus.

FICO Score

FICO Score is often confused with Vantage and other scores. It is an independent company that sells credit scores that are calculated on the basis of the information available in your credit report. It is the most popular form of calculation and used by lenders and other financial institutions to evaluate the creditworthiness of a borrower. You can buy your credit score from myfico.com, the official website of the company.

FAKO Score

All scores, apart from FICO, including Vantage Score and the other scores used by the three major credit bureaus, are referred to as FAKO scores.

It cannot be said if there is any difference in these forms of credit scores as the companies keep their methods of calculation and formula a secret. But if you take an overall view, there does not seem to be much difference. Also, you will know the type of score used to evaluate your creditworthiness unless the lender tells you.  But as FICO seems to be the most popular form of scoring, it is recommended that when you are working to improve your scores, you base your strategy on FICO score.