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If you’re shopping for a credit card or loan, the only words sweeter than “You’re approved!” may be, “You’re pre-approved!” But according to the FTC, many people who got “pre-approved” credit offers from Credit Karma weren’t approved for credit and, as a result, wasted time applying and saw their credit scores drop when their applications were denied.

An FTC lawsuit alleges that Credit Karma deceived people by claiming — falsely — that they had been “pre-approved” or had “90% odds” of approval for credit cards or loans offered by banks and lenders that used Credit Karma to promote their financial products.

Under a settlement, Credit Karma will pay $3 million to reimburse people who responded to its allegedly deceptive offers but were ultimately denied credit. The order also prohibits Credit Karma from making misleading claims that people have been or are likely to be approved for credit or loans.

Credit Karma touts online access to credit information and tools. To join, people must give Credit Karma personal information and agree to let it collect financial and other information about them. Credit Karma recommends financial products to its users and is paid by the financial product companies when users get their products.

According to the FTC, Credit Karma sent its users recommendations in the form of deceptive “pre-approved” credit offers from at least February 2018 through April 2021, knowing that users were more likely to respond if they believed their applications would be accepted. But, the FTC says, for many of the supposed offers, nearly a third of the people who applied were rejected by the companies whose product Credit Karma recommended, based on disqualifying financial characteristics, like bankruptcies.

What’s more, the FTC says, the companies’ reviews showed up as hard inquiries on the rejected applicants’ credit reports. A “hard inquiry” indicates that you have applied for credit and can lower your credit score. People also wasted significant time applying for credit cards they weren’t eligible to get, the FTC says.

Concerned about your credit? There are ways to monitor and protect it without giving away your personal information. Understanding Your Credit has the details.

146 Comments


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Vmarie
September 02, 2022

I never applied but got several offers over the years.

JOHANNE PICHARDO
September 02, 2022

Yes, I myself was falsely informed stating I would be eligible for a credit card as pre approved as well as a loan which was also declined

Lisa Fleming
September 06, 2022

In reply to by JOHANNE PICHARDO

I was also affected by the same claims by Credit Karma. How do I go forward?

Debbie williams
September 12, 2022

In reply to by Lisa Fleming

I was for capital one by credit karma and denied making my score from hard inquiry go down 15 points I have been trying to build my credit from no credit sense my husband died

Debbie williams
September 13, 2022

In reply to by Lisa Fleming

I was for capital one by credit karma and denied making my score from hard inquiry go down 15 points I have been trying to build my credit from no credit sense my husband died

FTC Staff
September 20, 2022

In reply to by Tiffanie Barnes8

If you were denied for a “pre-approved” credit product advertised by Credit Karma, report it to the FTC at www.ReportFraud.ftc.gov. After the settlement is final, the FTC will publish updates on www.ftc.gov/refunds. Don’t pay anything or give personal information to someone who offers to help you get a refund.

Renee’ H
September 06, 2022

In reply to by JOHANNE PICHARDO

Countless times I’ve applied and was denied and also misled on my credit scores … through Credit Karma 762, 736 but it really wasn’t that it was mid 600s

Bianey Maldonado
September 07, 2022

In reply to by JOHANNE PICHARDO

I was also affected by this getting offers that were not true

David Mingo
September 12, 2022

In reply to by JOHANNE PICHARDO

How do file to get portioned of the suit? I was mislead 7 months ago

DawnRey Downey
September 02, 2022

The article says it was through April 2021, but I just had offers from them just like this in 2022 and got denied even though it said I had “OUTSTANDING” approval rate!

Lori Welham
September 02, 2022

Yes, I fell for this and it ended up being denied and dropped my score. It was around 2018, I believe

Anthony
September 02, 2022

It is about time Credit Karma was held accountable for its deception.

Reuven Rahatlev
September 02, 2022

Hello. Based on Credit Karma's recommendation that I am pre-approved, on November 16th, 2020, I requested a credit card from JPMCB, and they did not approve me, and they hurt my credit score.
Thank god that you are protecting all the citizens, and thank god that we have you.

Sincerely,
Reuven Rahatlev

Edythe Hamilton
September 02, 2022

Credit Karma is still continuing to deceive people with approval odds for credit. I am a fallen victim numerous times this year in 2022.

Ed Holand
September 06, 2022

Ok So how do we get the money that this company is supposed to distrubute?

Dorothy
September 02, 2022

Yes I applied also & was told it would be a inquiry but I got hard hits on my credit report .I was shocked

Concerned Citizen
September 02, 2022

Good, finally! This happened to me. Thank You FTC! Many of these companies seem to do this, leave out those important details, and stopping them has to start somewhere.

N York
September 02, 2022

They are still doing it. I went straight to the app and took screen shots.

Lynn A. Reynolds
September 02, 2022

I got such an email from them within the last couple of months. I learned at the time I took advantage of such a claim and received a "rejection" that it was false. Now when I get one, I automatically delete. "You can't believe everything you read".

Denise S
September 02, 2022

It's about time! Thank you, FTC! Credit Karma did that to me many years ago so I never went through their site again. The preapproval emails are still coming in but hoping this will make them stop.

FTC Staff
September 20, 2022

In reply to by Denise S

If you were denied for a “pre-approved” credit product advertised by Credit Karma, report it to the FTC at www.ReportFraud.ftc.gov. After the settlement is final, the FTC will publish updates on www.ftc.gov/refunds. Don’t pay anything or give personal information to someone who offers to help you get a refund.

John Waitman
September 06, 2022

How do I see if im included in the credit karma mobe6 back??

Phyllis Kemp
September 02, 2022

This has happened to me. They said I had been pre-approved but I was sent a denial letter. Now it had an effect on my credit rating.

CP
September 02, 2022

Exactly; AND, I read on the app that it won't show up on the credit report and it did as a hard inquiry. Also, I did get the loan and it did lower my score.

Patricia Dockery
September 02, 2022

Kredit Karma haze on several occasions have recommended loans that I would be turned down for and my credit wasn’t that bad.

Christy
September 02, 2022

I applied for a credit card the Credit Karma said I had 100% chance of approval. I got the card but it dropped one of my credit scores by 63 points. My boyfriend, with worse credit than mine, applied for a credit card on cards website, was approved, and only dropped his score by 3 points. Not going to trust Credit Karma again.

Bobbi
September 06, 2022

I have used Credit Karma for years and have seen these items, but have never applied. I am going to delete my account

Diana
September 06, 2022

Well, I'll have you know that Experian does the same thing, and I have been a victim of what the FTC is considering "deceptive" pre-approved credit card and loan offers. My credit rating continues to drop because of these hard inquiries on my credit report. The other issue is that even if you get the credit cards - with high interest rates, upfront fees, and small credit limits, you end up having too much of a ratio-to-debt, which then leads to decreased credit ratings.

Elaine
September 26, 2022

In reply to by Diana

I was approved, changed my mind and already had charges 100.00+ although I never used the card at all.Credit Karma is still promoting pre-approval chances online and advise one way to improve your credit is to apply for the cards they suggest. I worked years to improve my credit score and fell victim to Credit Karma. I was shocked and mentally distraught. My plans to obtain financing to renovate our home were out of reach. Credit Karma and the Credit Card companies are nothing but schemes. CC’ s make money on approvals bc of int rates
Karma gets incentive for traffic seeking cards in my hpnest opinion.

Cheryl
September 02, 2022

I have fallen for that a couple of times I am not sure if I got hit with a hard check or not though

CAROLIN G HOLMES
September 02, 2022

I HAD CREDIT KARMA AND HAD TRIED 2 times for a credit card that they said I WOULD BE APROVE AND TRIED I WAS NIT APPROVE, BUT HAD MY INFORMATION AND I DID NOTICE EVERY TIME I DID IT MY SCORE WENT DOWN

Christina Greaves
September 02, 2022

I have been a customer with Credit Karma for several years now and they always prompt me to either apply for a Personal loan, or get another credit card as pre-approved or I have very good odds. They do have all my personal financial information.
Should I be concerned?
Sincerely,
Christina Greaves

Tina
September 02, 2022

Shouldn’t Experian be included. They use the same90% approval with credit one capital one

Concerned
September 06, 2022

In reply to by Tina

I wonder about them. Every time I'm there they try to get me to upgrade to their paid service.... IDK it's just kinds sneaky how they minimize the "no thanks continue free" option.

Chuck Sinclair
September 02, 2022

I am a current member of Credit Karma. This has happened to me at least 4 times or more and I had no bankruptcies. It was just that my credit history was too young. I only applied for these credit cards because Credit Karma suggested that I apply and it would raise my "Available Credit" on my credit report which would raise my Credit Scores. However, I was denied these credit cards and instead received "Hard Inquiries" which lowered my Credit Scores.

Now, Credit Karma says that, "We suggest offers based on your credit, Approval Odds, and money we make from our partners.
Suggested for your credit: Congrats: your chance of approval is outstanding.
(See All Suggested Offers)" You cannot turn off these offers but you can turn off some notifications of these offers. I used to get inundated with email offers everyday, sometimes several a day until I turned off the notifications. Then my emails increased for me to check in on my account for many different reasons. I would check in and was immediately met first with an offer for credit either, a loan or a credit card. I was never directed to the issue described in the originating email. So now I just ignore the emails and website notifications.

I'd like to add that I've also seen from other credit issuing and credit monitoring companies, language like, "it won't hurt your credit to "Check/See" if you qualify. This is true to a point. What they don't tell you is that each time you "Check/See" it is an inquiry(soft) reported to the credit bureaus and if you have too many in a short time frame it will decrease your credit score.
If I knew then what I know now. I hope this helps anyone that reads this post.

Concerned
September 06, 2022

In reply to by Chuck Sinclair

I wondered about those Check/See things! I didn't do them not trusting anymore after getting burned by the so-called offers but that makes sense and is good to know. TY!

Lesley Harrington
September 06, 2022

In reply to by Chuck Sinclair

I started getting these offers from Credit Karma 2-3 years ago and only applied because they said I have been pre-approved. Been working on improving my credit over past 5 years, so thought I was finally getting better. I am afraid to check my scores because I can't afford to lower my credit any further.
Of course I got denied each time, then being offered a card with a $500 credit line but must make a 500 deposit on it ! I deleted account and unsubscribed. Sooo angry. They do the opposite of what they're supposed to. They really should pay for the harm they've done to many of us out here.

Natalie Brown
September 06, 2022

In reply to by Chuck Sinclair

I experienced the same situation. Was told that it would raise my score and I was approved with an excellent chance. I have applied and was denied twice. I am was told two other cards were approved but have not received the cards. It showed four hard inquiries on my credit score and brought my credit score down.

Crotalus
September 06, 2022

I never applied for any of Credit Karma's recommended cards, for lack of trust.
I checked out the interest rates for recommended cards and found all of them extremely high, way higher than my current cards (like 10 to 20 %)!

I think the high interest cards pay Credit Karma money to sucker people into applying for them. I don't believe they use any of my information, in relation to the cards they always recommend.

Unfortunately, I don't have enough data to back this suspicion up.

Carmelita Barrett
September 06, 2022

I was contacted by credit karma about the same thing

Staci Johnston
September 06, 2022

The same thing happened to me. Credit Karma would say I was pre approved so I would apply and then be denied instantly. My credit score dropped because of this.

Tabatha
September 06, 2022

Yes, indeed I have applied numerous times for there pre approval credit cards and loans. However, I was denied leaving myself to wonder how your being told your pre approved for these things to be only denied in the end. Through out the years it's happened to me several several times. It should never mislead anyone to apply for services to be denied, if it's stating pre approved prior to filling in your personal information.

FTC Staff
September 20, 2022

In reply to by Tabatha

If you were denied for a “pre-approved” credit product advertised by Credit Karma, report it to the FTC at www.ReportFraud.ftc.gov. After the settlement is final, the FTC will publish updates on www.ftc.gov/refunds. Don’t pay anything or give personal information to someone who offers to help you get a refund.

Linda S Showalter
September 20, 2022

R u kidding I can't tell u how many times I fell for it boy what a dummy I am shame on me for falling for such a scam I should have known better I got more and more angry 1st at myself for having such bad credit I got denied then at them for saying I was pre approved I think they need to get every client and see how many actually got scammed and the company's who allowed them to use them need to pay up as well how do I get my info off credit fakema

Tiffany Johnson
September 06, 2022

I am signed up with credit karma and they have told me on more than one occasion I am pre approved and I go do as they tell me and I am denied denied denied. Its like you just told me Im pre approved now Im not. I always wondered if it goes against my score but it says it dont. Yet before I knew my credit was bad now it won't show me a thing. I just dont get it and this is before I had to freeze and lock due to breaches on my account. Go figure..

naomi oligney
September 06, 2022

I had this happen with Capital One Getting a 'better card' They said I was pre approved & it went on my credit report but I was Not Approved in the end. They stated wouldnt effect credit. Pre Approved but once I applied for it, the no-credit report issue goeds onto credit report inquiry.

Lisa Loesch
September 06, 2022

I have applied for credit cards or a personal loan, with the promise that I had a high rate of approval. I would say that over the years I have applied at least 4-5 times & each time was denied. I was disappointed each time, because Credit Karma led me to believe that I had an excellent chance of approval. I would like to join the suit against them