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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.

143 Comments


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C.Hogan
September 06, 2022

They wouldn't let me close out my account. Stating I had an open saving account. I do not have an open account and filed a formal complaint to have my account closed and withdrew any and all consents to access my personal information, due to the fact that it was negatively affecting my FICO score and I feel because the share the data mined as a broker and not and actual credit company it has adversely allowed unauthorized access to my personal information. I wouldn't have discovered this fact if I had not received a denial letter for a line a credit that I did not apply for.

Sharon
September 06, 2022

This has happened to me a couple times on credit karma. I need a personal loan to help out and I noticed it said I was pre-approved. What's worse is they sought me out. Like the algorithm knew I needed money

Sharon
September 06, 2022

In addition to my original comment. My score did drop .I trusted the pre-approval twice

Deb Townes
September 06, 2022

Fell for the outstanding approval a couple of times. Credit dipped.

Linda L Young
September 06, 2022

I applied for a 90% approval recommended card through Credit Karma and was not approved and had a hard inquiry placed on my credit. I also cannot get into my account no matter how often I change my password. I have savings with them and can’t get it disconnected.

James Hyten
September 06, 2022

I applied for several credit cards, personal and auto loans through Credit Karma for this very reason. I was and still am trying to improve my credit and Credit Karma knew this. So the kept sending me emails saying I've been pre-approved. So I would fill out the paperwork and end up getting an adverse action denying my credit. Then what would happen? The credit inquiries would lower my score 1 or 2 points here and there over the last 2 years.. It's a shame that hard working people just trying to make a better life for their family would have to go through this because Credit Karma would get a kick back for referrals..

Lea Workman
September 06, 2022

I have definitely received several offers and have applied at least twice and was denied……

FTC Staff
September 20, 2022

In reply to by Lea Workman

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.

Tia
September 06, 2022

I applied, but was denied. It is so miss leading.

Lisa Dahlgren
September 06, 2022

Every time I open that app I'm always saying look here's a credit card for you that you will be approved for on credit karma and I was dumb enough to try several times how do I get a claim form for this

CAT
September 06, 2022

Yes I applied for a "pre approved" AMEX on Credit Karma, they ran a hard inquiry on my credit and I was denied....How do I file a claim?

Soraya baric
September 06, 2022

I don’t remember exactly what day but I know when I join Credit, karma I had apply and I was denied .

Virmarie Franceschi
September 06, 2022

I was also mislead when I applied and then denied for credit card.

Elba Poppiti
September 06, 2022

I too have applied for credit cards suggested by Credit Karma and was rejected 3 times now i have 3 negative on my credit history

Oh they brough…
September 06, 2022

I believed that I was approved but was denied and I had been working hard to get a house.

Deborah Simms
September 06, 2022

I was declined for some loans credit Karma said it would not affect my credit score but it dropped.

FTC Staff
September 16, 2022

In reply to by Deborah Simms

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.

Bustacrymz
September 06, 2022

This has plummeted my credit score! I applied only to card which boasted an “outstanding “ approval chance-I was denied and each time my score dropped. I’m so glad they may be held accountable!

Lisa
September 06, 2022

I have been using Credit Karma for awhile now. I was thinking this application was great. Yes I was told by them I was mislead by saying" I was pre-approved on their site",their was a few that said this & then I got emails saying " You rock on credit" then it said click this for more information.
This has just happened recently Sept 1st.

Starr Collister
September 07, 2022

I've definitely been a victim of credit karma

jennie roberts
September 07, 2022

My credit was deeply affected by this. How can I file a claim to receive compensation from the suit?

Lorene Cope
September 07, 2022

This has happened to me! What can I do about it?

John Neuharth
September 07, 2022

How long have the BIG THREE credit card companies played along with this scam? Any account which has seen its FICO score lowered by a Credit Karma inquiry should immediately have its score adjusted. A $3 million fine is nothing but a slap on the wrist and Credit Karma knows it.

Monique Cox
September 07, 2022

I was with them for a long time it wasn't helping me at all I'm want to add my name to the list

Jennifer
September 07, 2022

I have applied for credit cards through Credit Karma because they said I had excellent chance of being approved. Both times denied and credit was affected. Credit Karma also told me I could save hundreds by refinancing my vehicle with "excellent approval chances". Again denied and Credit affected. My credit score has gone down significantly.

Adam Haywood
September 07, 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

Georgianna Casarella
September 07, 2022

I have gotten several of these!

Michael
September 07, 2022

Ive also been preapproved with over 95%ratings instantly declineing me....but am reading all this and probably will be skipped over cause dont know how to file and yes i was affected they even had me purchase my credit report sending me to their "3rd party" affiliates...lost thousands....

Where can i can if at all now?

Angela Rowan
September 07, 2022

Yes this has happened to me. Said I was pre-approved wouldn’t affect my score. Yet it did affect my score.

Johnny L Swain
September 07, 2022

Several times but mainly during the last year I have been subject to this. I'm currently rebuilding my credit and believed it was nice to know that credit karma was thoughtful enough to have this feature. Terrible feeling coming out unable to be approved when the odds states highly I would. I hope we get Justice!!

Liz Torres
September 07, 2022

I was also affected how can I file a claim

Lorine Derham
September 12, 2022

In reply to by Liz Torres

How do I file a claim? I tried to leave my own comment but it wouldn't let me.

FTC Staff
September 20, 2022

In reply to by Lorine Derham

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.

Mary Holsapple
September 07, 2022

I applied for some credit card on credit karma and never got approved. I even got emails about loads. My credit score dropped 10 points one month then the next 30 points dropped. I would love to fine out how to get into that lawsuit against they.. I closed out my spending account..

Desiree
September 07, 2022

Credit karma been sending me pre-approval and I never get approved. I was suggested I open a pre-approval car loan recent and now they taking back amount of offer and etc

Dana Campbell
September 07, 2022

Yes yes yes most definitely got the pre approvals. Emails or when I went on the app to look around there they sat. It said improve your credit by applying for these credit cards you were pre approved for. So k believe them and applied. Big mistake. Or get an email saying you are pre approved for xyz credit cards it only takes a few minutes to get your pre approval in to get more credit to improve your score. I.just didn't understand why I was always getting denied and I sure wasn't improving my credit score. I was steady messing it up for just applying. And I definitely was / am working on my.credit score. I finally did stop applying for everything they told me how great my approval was. It really makes someone upset when they are trying so hard only to.see it get worse and worse because credit karma that is supposed to look.out for you and help.get credit score up. Does the exact opposite. Thank you for getting them to face the wrongs.i hope they actually do give some kinda relief for the wrongs. I hope they don't pick out some people and not pay everyone that did apply and was denied. Maybe we can file for. The payment so they cant.ignore the fact each person deserves at least that much from credit karma. Thank you

Gina B
September 07, 2022

I have been denied debt consolidation after multiple pre aprroval emails from Credit Karma, negatively effecting my credit score.

Gina Russo
September 07, 2022

I did apply to a credit card that indicated could transfer all my debt. Use one card to pay off but I was not approved in 2021. Working through rebuilding my credit so it sounded like a good thing at the time. But it reduced my credit score even more and waste of my time.

Talia Stainbrook
September 07, 2022

I was affected also

Nora Davis
September 12, 2022

Yeah they got me too. Applied and was denied

Angela Guzman
September 12, 2022

I also applied for these credit cards, as other did because Credit Karma suggested that if I apply it would raise my "Credit Score" on my credit report. However, I was denied these credit cards and instead received "Hard Inquiries" which lowered my Credit Scores.
Based on Credit Karma's recommendation I was pre-approved to received these offers but, that was not the case. This happened several times since always and I have been with Credit Karma for at least 10 years. And now this article tells me how gullible we all are to these companies. Can not trust anyone anymore I guess.

Lane B
September 12, 2022

How do I take action against Credit Karma? They have falsely shown me pre approval odds a lot over the years and most the time I’m not approved so there you go.

Lorine Derham
September 20, 2022

How do I sign up for credit karma law suite?

Lee Morris
September 12, 2022

I was also fooled into "excellent approval" odds on loans and certain credit cards my credit score was 703 and now I'm down to 500. I am very upset about this.

Robert Whitener
September 12, 2022

I am always getting a email or call or something in the mail telling me I am pre-approved and when I apply I get denied. Now I am getting data breach notifications

JESSICA HAUMSCHILD
September 13, 2022

I've been using Credit Karma for a while now and have been going through all the pre- approved things trying to build credit and my score has been going the opposite way, now I know why. What we do if feel as though we were effected by this? Thanks

Kalika B
September 16, 2022

I was affected by the pre-approval

FTC Staff
September 20, 2022

In reply to by Kalika B

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.

Luretha S
September 12, 2022

I have credit Karma and I received Pre- Approved Credit Card Offers and I applied for certaincredit cards and loans and was denied. It affected my credit score