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FICO and FAKO – What is this?

When you're talking about credit repair, it pays to understand the language (i.e. the business jargon normally used). It's important to know the meaning and implications of each term, since ignoring or assuming the meaning of something could spell disaster for you later on. In this case, we're talking about the terms "FICO" and "FAKO."

What Is FICO?

Your credit score, as you might be aware, is calculated based on the information contained in your credit report and your credit history. There are three major credit bureaus, and each one has its own formula for calculating the score – TransUnion has EMPIRICA, Equifax has PLUS and Experian has the BEACON.

There is a newer, and until now, not very well known score, called the VANTAGE score, which is a formula developed by all the three credit bureaus together in an attempt to merge the method of calculation. This score formula includes non-traditional forms of debts such as utility payments and apartment leases as well.

FICO score – so popularly attached to the credit score concept – is in fact a brand name for credit score as developed, calculated and administered by an independent company named, "Fair Isaac." In other words, FICO stands for "Fair Isaac Corporation." You can get your FICO score from

What Is FAKO?

Anything that is not FICO is called FAKO. If your score is not coming from, then that score is called a FAKO score.

What's The Difference Between The FICO and FAKO Scores?

Not much – the only difference in the credit scores you get from various point of reference is the way they calculated it; i.e. their formula. However, in the end the credit score as it comes from any source will be interpreted the same.

It will not happen that, when your FICO score indicates you credit standing is bad, any FAKO score would indicate that you have a good credit standing. With a few slight variations, your score will read nearly the same no matter who calculates it nor how it is calculated.

Which One Is More Important?

Frankly speaking, your credit score is important for the fact that it indicates your standing with your debts and credit. Now, if you want a better score, stop bothering about which score you should check. Take the FICO score as a guide and take all the measures you can to improve your credit. When your FICO score improves, all the other FAKO scores will improve as well. This is because, as explained earlier, all formulas more or less converge on the same principles of credit when they compute credit scores.

Best Practice Method

If you are in the process of credit repair, ensure that you have as much (accurate) information as you can, about the present position of your credit. At this time, it would be good if side-by-side with the FICO score, you also take into consideration what the three credit bureaus have to say about you. The good news is that all three credit bureaus give your credit report for free once a year – so you can get yours free of cost.

4 Steps That Make a Good Retirement Plan

How much attention are you giving to your retirement funds? Are you ready for retirement? You would be surprised how many people answer these questions vaguely and with hesitation.

Here are four steps that will help you ensure that you have a comfortable senior-age life.

Step #1: Know Your Goal

You need to have money that will support you for about 20-30 years post retirement. This is a time when your medical liabilities will be higher as will be your personal assistance costs. Most people would be surprised and even scared by the amount that is computed for the period. Do not worry; there are many ways to help you raise the required funds.

Step #2: Start as early as you can.

Contribute as early as possible to IRAs and employer sponsored retirement plans. This is one of the best ways to contribute to your retirement nest egg. There is a new trend emerging today. Some extremely money-savvy parents start investing in retirement plans for their children right at the time of their birth.

What does this mean? It means you can give your children the advantage of about a 20-25 years head start with such savings, which can make an amazing difference at the time of retirement. These children will have the interest and investment of an additional 20-25 years, which will be huge!

Step #3. Invest.

Ensure that you put aside 20-35% of your income as savings. However, do not let your money sit idle. Research and take advice from leading financial professionals to find out the best way to invest your savings, so as to bring in the maximum dividends for you.

Investment can also be in the form of real estate, which will always be an exceptional source of future income. Insurance too, is a form of investment. Ensure you choose your policy wisely so you can not only have a handsome return on your money, but also ensure that you and your family will be well provided for in case of any mishap that will prevent you from productive employment.

Step #4. Pay attention to the tax burden.

When you reach the age of 70, you will have access to retirement funds that had their tax deferred. This means that you will be required to pay tax on these accounts. Have you made provisions to absorb this additional burden? Here too, the advice of an expert will be priceless.

This is an aspect that is most ignored by the majority of people. They do not count or make provisions for tax payment of their maturing retirement accounts; when they are faced with it, they find that the overall amount might be less than what they needed for a comfortable life during their senior years.

The above are foolproof steps that will ensure you do not outlive your money, which in this case would be a disaster. There is one more thing you need to do as you step into your post-retirement life – ensure that you have a proper will drawn up so, your heirs will not be harassed by financial matters after your demise.


The Credit Repair Organizations Act
The Fair Debt Collection Practices Act (FDCPA)
Fair Credit Reporting Act (FCRA)
Consumer Credit Protection Act
The Fair Credit Billing Act
The Equal Credit Opportunity Act (ECOA)


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