Understanding Fico Scores

Understanding Fico ScoresUnderstanding fico scores – why do you get a different FICO score from each bureau, and why your bank gets a 4th one?

If you’re looking for the FICO credit score formula – click here.

Many people that try to track, monitor and understand their FICO score end up confused. Here is an example to an email I got yesterday:

I checked my credit score with all three bureaus and got 547 from Equifax, 615 from Experian and 601 from TransUnion. My bank told me that I’m not approved for a home loan because my score is only 570. I could use some help understanding my credit score. Thanks“.

People are confused about FICO scores, and for good reason. Every time they check – they get a different score. Here are the two main reasons that account for the differences in your FICO score:

Three Bureaus – Three Databases – Three Scores
All credit scores are database driven, and FICO credit score is no different. Your credit score is derived from your credit information.

Each credit bureau has its own database. They do not share information between them. In addition, not all financial institutions report to all three bureaus. As a result there are differences between the data bases.

Example 1: You have a store credit card where you live. Your store only reports to Equifax & Experian, but not to TransUnion. Your TransUnion report will not show any information related to that card, whether positive or negative.

Example 2: Your auto dealership asks your credit score from Experian. The Experian report will show a hard inquiry, while the Equifax & the TransUnion’s won’t.

In addition to that – each bureau has its own unique version of the FICO credit score. The result is that your FICO score from each bureau will be different.

Different Lenders – Different FICO Versions
As to further complicate things, there are several versions to the original FICO formula. A Consumer version (called ‘Standard’ and the only one you  as a consumer can get), a Car Lenders’ version (called ‘Auto Enhanced‘) and a Mortgage version (called ‘Factual’).

Each version employs different weights and produces different score. The Mortgage version produces lower rates than the consumer version, while the car lenders’ version produces scores that can be 50 – 100 points lower or higher, depending how you’ve handled prior car loans.

So even if a mortgage company and an auto dealership would check your score at the same bureau – each will get a different score. If you check your score – you will also get a different result.

So what is my REAL FICO? 
That’s the point – there is no just one REAL FICO, or should I rephrase – you have several REAL FICO scores. All of them are real, depending in who is the lender and which bureau supplied it.


As of April 2015, myFICO.com sell consumers their more then 19 versions of their FICO scores.

Until now, the only score consumers could buy was a generic version of FICO, which was different from what car dealers see. Starting this year – consumers can get the exact same score car dealers, mortgage officers, Credit Card companies etc get, bringing more power into the hands of consumers. For more information, see this post from myFico.com

If you purchased your credit score from anywhere but myFICO.com, then it’s a FAKKO score (sometimes spelled FAKO or FACO). FAKKO score is an un-official term usually used in forums. It refers to any credit score that’s not a FICO score.

FAKKO scores do not necessarily reflect the scores that lenders really use to approve your applications. Even a FICO score purchased online may not be identical to the one your lender uses. FAKKO scores should be considered for educational purposes only.

So how do I know which version my potential lender uses?
The only way to find out is to have your lender tell you what version they use. Starting in 2011, every lender who either denies your application or approves you for less favorable terms is required to provide you a free copy of your credit score, if your credit score is the reason for that decision.

Experian & FICO
Experian no longer uses the FICO credit score system. Instead, it is using the Vantage Score solely. This means that not only you can’t get a FICO score directly from Experian, they don’t allow myFICO.com to provide customers a FICO score based on their Database!

Lender continues to use Experian based FICO scores, but as a consumer you no longer have access to it.

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