SEPTEMBER 1, 2022 – OAKLAND, CALIF. – Credit Karma, the consumer technology platform that helps members make financial progress, issued the following statement on today’s agreement with the Federal Trade Commission (FTC):
“We fundamentally disagree with the FTC’s allegations about marketing terms that aren’t even in use anymore, but ultimately we reached this agreement to avoid disruption to our mission and maintain our focus on helping our members find the financial products that are right for them,” said Susannah Wright, Chief Legal Officer at Credit Karma. “Our industry-leading technology provides the transparency our members need to shop for financial products with more confidence.”
The agreement announced today is consistent with how Credit Karma already runs its business. The FTC’s allegations are focused on Credit Karma’s historical use of the term “pre-approved” for a small subset of the credit card and personal loan offers available on Credit Karma’s platform prior to April 2021, and do not challenge the approval odds language Credit Karma has provided to its members since April 2021, including through the present.
Credit Karma’s business model is structured to ensure its success is aligned with the needs of its members and partners. It only gets paid when members are approved for credit cards and personal loans and receives no compensation when members are denied.
Because banks and financial institutions use massive amounts of data and machine learning models to approve or deny people for financial products, it can be nearly impossible for the average American to have any indication of whether they are likely to be approved for financial products. This lack of industry transparency can lead people to apply for products where they are likely to be denied.
Credit Karma’s industry-leading technology provides members with greater transparency into their likelihood of approval for the financial products before they apply, without impacting their credit score. Members shopping for credit cards on Credit Karma have an over 50% higher approval rate than the national average1. By better matching people with financial products, Credit Karma allows members to shop with more confidence.
About Credit Karma
Founded in 2007 by Ken Lin, Credit Karma, an Intuit company (Nasdaq: INTU), is a consumer technology company with more than 120 million members in the United States, U.K. and Canada, including almost half of all U.S. millennials. While best known for pioneering free credit scores, the company’s members turn to Credit Karma for everything related to their financial goals, including identity monitoring, applying for credit cards, shopping for loans (car, home and personal), auto insurance, savings accounts and now checking accounts through our bank partner, MVB Bank, Inc., Member FDIC — all for free. Learn more about how Credit Karma members are making financial progress on TikTok, Instagram and Twitter.
1 Based on a comparison of Credit Karma member approval rates in calendar Q4 2021 vs the national approval rates for general purpose credit cards from 2020 according to the Consumer Financial Protection Bureau’s 2021 Consumer Credit Card Market Report (36%).