Prices are going up and most likely interest rates will catch up soon. It’s time to make that move to invest in real estate. However, you want to do the right thing and plan the move. So, you Google “credit score” and find a site that offers you a free credit score. Terrific! You get your score, and it is 760, and the site notes this score is in the “excellent” range, so you call your trusted Realtor and friend, to help you make that dream come true.

The same day, you spend the morning driving through your neighborhood and you discover a new listing for your dream house that looks like a great investment! You commit to spending the rest of the day with a loan consultant to get pre-approved for a loan. An hour goes by at her office, and after a short loan application process with many questions, she finally pulled your credit file. Shock, horror and surprise! Your credit score was not 760! WHAT? You reply to her, “wait a second, I got my score online earlier, from one of the three national credit reporting agencies and here’s a printout of my report and score.” What happened? A thought came to mind, Lorraine’s credit inquiry brought down your score! Yes, that was on the 11:00 o’clock news, and it’s true!

Lorraine explains. Your FICO® score is 698, and while that is good, it does not fall into the best rate tier, and if you want to get that rate, you need to pay a risk base adjustment fee with either a higher interest rate, or by paying an additional one point to buy down the rate. OMG, the interest rate she quoted doesn’t look even remotely like the one you got online.

You feel betrayed, cheated and embarrassed to learn this.

Here’s the truth of the matter: Credit scores obtained (either for a small fee or even for free) from the three national credit-reporting agencies (CRAs) are FAKO scores (meaning fake). The false optimism that a FAKO score gives us compels us to run right out and apply for new credit: pre-approval to purchase a home, the credit card offer we just received in the mail, a new auto loan or lease. Once we commit ourselves to the process, we become really disappointed that the score the creditor has is much lower than the score that we obtained from one of the three CRAs, and many times we either don’t qualify for the rate offered, or are not eligible for any credit purchase at all.

Lack of credit education can easily be fixed, but the prevalence of misinformation comes directly from the credit industry itself. It is difficult to discern fact from fiction. Please beware so-called credit experts, mediocre financial professionals, sleazy credit repair companies, AND the three national credit-reporting agencies themselves!

These CRAs, Experian, Equifax and TransUnion, sell us their own versions of credit scores, or FAKO scores, such as; PLUS score™ from Experian, Trans-risk™ from TransUnion, Equifax Credit Score™ from Equifax, and Vantage ScoreSMfrom all three bureaus. They offer consumers these scores under the pretense that these are the real FICO® score that U.S. lenders use in 90% of their credit decisions.

In reality, they use imbedded disclosures in mysterious places on their Web sites revealing that their credit scores are consumer scores for educational purposes and are not used by lenders. Consider this comparison: Would you buy a watch that only gives the approximate time of day?  Furthermore, Fannie Mae and Freddie Mac mandate lenders to use FICO Scores in loan underwriting, and the GSEs do not accept loans underwritten using other score brands.  So irrespective of what the bureaus want people to believe, the scores that mortgage lenders will use are FICO Scores which homebuyers can get from  Period.

Sadly, federal laws do not require the three credit-reporting agencies to provide us with credit scores that lenders and creditors actually use. In addition, the three CRAs do not disclose to us that their FICO® knockoffs or so-called educational scores can differ significantly from FICO® scores.  Furthermore, and while we are getting our free annual credit report from , the three CRAs bombard us with messages on almost every page of this only true free credit report, steering us to their individual web sites to purchase their FAKO scores and other products.

What is a FICO® Score, and how can you get it?

In general, when we talk about “our credit score” we are talking about our FICO® score, which is developed by Fair Isaac Corporation, and is the gold-standard scoring model used by lenders and creditors. The FICO® score is a number that summarizes our credit risk, based on a snapshot of our data at any one of the three national credit-reporting agencies, Experian, Equifax or TransUnion, at a particular point in time.

Source: Fair Isaac Corporation

The FICO® score, which ranges from 300 to 850, evaluates our payment history, how much we owe and our pursuit of new credit. So, for a bank or a creditor who’s making a decision about extending credit to us, the higher our score, the more likely we are to pay our bills on time and be approved for lower interest rates and fewer fees. The lower our score, the more likely we are to miss paying some of our obligations on time in the future, and if approved for credit, we’ll be charged higher rates and exorbitant fees. is the Web site where you can be confident that you are getting your REAL FICO® score (note, I do not work for Fair Isaac Corporation, nor do I receive any compensation from the company). Knowing your FICO® score is the smart thing to do when we you are applying for credit; whether it’s a credit card, a car loan, a student loan, a business loan or a mortgage. Remember, getting your own score will not hurt your FICO® score; it will simply make you aware so you can plan appropriately when applying for any type of credit.