Credit Karma fined $3M by FTC for misleading consumers with credit card offers

Re:Credit Karma fined $3M by FTC for misleading consumers wi... by kodah on Monday September 05, 2022 @01:12AM (#32720797)

I defaulted on debt and was in the military for a few years after 2008. I challenged my debt and won. When I started fresh I had a 500 credit score (which sounds like what you have). What I learned is that credit offers come to one of two kinds of people: people with really good credit and people with moderately shitty credit. If you have no credit then there's no offer for you. The best way I found to improve my credit was to pay bills. Things like a cellphone, rent, utilities, etc all get reported to credit bureaus.

My working theory is that this case exists because they have no data to calculate and classify risk on you with.

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Re:Credit Karma fined $3M by FTC for misleading consumers wi... by SilasX on Monday September 05, 2022 @01:31AM (#32720887)

> When I started fresh I had a 500 credit score (which sounds like what you have).

No, when your credit history is non-existent, the free credit score sites will happily tell you it’s much higher than that (mine was reported as 720-740 when I lacked history), but you’ll still get auto-rejected for everything.

Interestingly, I emailed Arnold Kling, an economist writing about the subprime market at the time (2007) and he refused to believe that was happening, and insisted I must have some horrible default on my record. (I didn’t.)

A 500 credit score from a default is much better than having no history.

(I’m not the OP but was in a similar situation.)

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Re:Credit Karma fined $3M by FTC for misleading consumers wi... by distantaidenn on Monday September 05, 2022 @02:21AM (#32721140)

Did you ever get the situation sorted? If so, any tips?

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Re:Credit Karma fined $3M by FTC for misleading consumers wi... by SilasX on Monday September 05, 2022 @02:51AM (#32721301)

I had a financial advisor connected to a bank. I applied for a credit card there and followed up on the rejection at the number they gave. (I might have had to ask the advisor to intervene, not sure.) I got through to the CC people, they asked me a few more questions (previous employment[1]) and then approved one with a low limit. From then on I built a history.

Edit: ah, you’re the OP. Did you have that same issue, where sites would assure you you have a good credit score even as you keep getting rejected on any credit application?

[1] If they lean further on credit reports as a job applicant filter, that could turn into an even worse catch-22!

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Re:Credit Karma fined $3M by FTC for misleading consumers wi... by sangnoir on Monday September 05, 2022 @03:46AM (#32721593)

If you have the cash flow, you can get a secured credit card or secured loan, which is giving a bank the money to lend[1] back to you at no risk to them. i.e. if you give them $500 as security, they'll give you a credit card with a $500-limit, which you still need to settle like any other credit card. Most people who didn't miss payments get their security back after a year.

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