Does Applying for a Credit Card on Credit Karma Hurt Your Score?

Applying for a credit card can be a nerve-wracking experience, especially if you’re unsure of your chances of approval. Nobody wants to deal with the sting of rejection, but there’s more at stake than just your ego.

Every time you apply for a credit card, the issuer typically performs a hard inquiry on your credit report. These inquiries can ding your credit score by a few points and remain on your report for up to two years. Accumulating too many hard inquiries can negatively impact your creditworthiness, making it crucial to understand your approval odds before taking the plunge.

This is where Credit Karma’s Approval Odds come into play. This feature helps you assess your likelihood of getting approved for a specific card, potentially saving you from unnecessary hard inquiries and their associated credit score dips.

Understanding Credit Karma Approval Odds

Credit Karma Approval Odds are personalized estimates based on your unique credit profile. These are recommendations to assist you in choosing which cards to apply for; they are not assurances of approval.

When you’re browsing credit cards on the Credit Karma app, you’ll see a star with a checkmark and your Approval Odds displayed below each card image. These odds can range from “outstanding” to “poor,” indicating the likelihood of your application being approved.

Why Approval Odds Don’t Guarantee Approval

Even with “outstanding” approval odds, it’s crucial to keep in mind that credit card issuers, not Credit Karma, have the last say in matters of approval. Even with high approval odds, a green light isn’t guaranteed for the following reasons:

Different Credit Scoring Models: Credit Karma uses VantageScore 3.0, which may differ from the scoring model used by the credit card issuer. This discrepancy can lead to variations in your perceived creditworthiness.
Unique Credit Factors: Credit scoring models consider various factors, and each model may weigh them differently. While your scores may appear similar across different models, the underlying factors may not be identical.
Additional Considerations: Credit card issuers consider factors beyond your credit score, such as your income, employment history, and existing debt obligations. These factors can influence their final decision, even if your credit score suggests you’re a good candidate.

What to Do If You’re Not Approved

Getting denied for a credit card can be frustrating, but it’s not the end of the world. Here are some steps you can take:

Don’t Panic: While the hard inquiry from your application may temporarily affect your credit score, getting denied won’t further damage it. The impact is usually minimal and improves over time.
Review Your Credit Reports: Ensure all information on your credit reports is accurate. If you find any errors, dispute them immediately.
Improve Your Credit Utilization: Aim to keep your credit utilization below 30%. This means using less than 30% of your available credit limit.
Make On-Time Payments: Paying your bills on time and in full is crucial for maintaining good credit.
Consider Reconsideration: If you believe the credit card issuer made a mistake, contact their reconsideration line to plead your case.

Building Your Credit for Better Odds

The best way to increase your chances of approval for future credit cards is to build and maintain good credit. Here are some tips:

Make On-Time Payments: This is the most important factor in building good credit.
Keep Your Credit Utilization Low: Aim for a utilization rate below 30%.
Limit New Credit Applications: Avoid applying for multiple credit cards in a short period.
Become an Authorized User: Ask a friend or family member with good credit to add you as an authorized user on their credit card.
Monitor Your Credit Reports: Regularly check your credit reports for errors and dispute any inaccuracies.

The Credit Karma Approval Odds are a useful resource for determining your likelihood of being granted credit for a credit card. But it’s important to keep in mind that they’re not guarantees and that the issuer’s choice may be influenced by other factors. You can improve your odds of being approved for the cards you want by learning how approval odds operate and taking action to establish good credit.

What can you do with your credit scores?

Although credit scores aren’t exactly tools at your disposal, your credit score can reveal certain information about your financial situation. The first step to knowing what you can do with your credit scores is to check your credit. A good credit score increases your chances of being accepted for low-interest personal loans, auto loans, mortgages, rewards credit cards, and even lower auto insurance rates. Credit isn’t the only aspect that determines approval for these financial services, but it’s often a major factor.

Improving your credit might increase the likelihood that your applications will be approved in the future if it’s not in the best of shape. It is still possible to obtain insurance, a loan, or a credit card if you need them right away, but your costs will likely be higher than those of an applicant with excellent credit.

How does Credit Karma get your credit scores?

Credit Karma provides you with free credit reports and scores by partnering with Equifax and TransUnion, two of the three major consumer credit bureaus. (Experian is the third major consumer credit bureau. ).

Credit Karma can offer free credit scores and reports because we make money in other ways. For instance, we utilize the data in your credit profile to suggest products that will enable you to save money. Credit Karma may receive compensation from the bank or lender if you apply for a product using these recommendations.

BE CAREFUL USING CREDIT KARMA – WHAT YOU SHOULD KNOW

FAQ

Does applying for a credit card through Credit Karma affect your credit score?

These are typically placed on your credit reports when you apply for a new line of credit, regardless if your application was approved or not. So if you apply for a credit card or loan through Credit Karma or elsewhere, you will receive a hard inquiry, which can affect your credit scores.

Is Credit Karma a soft pull?

Checking your free credit scores on Credit Karma doesn’t hurt your credit. These credit score checks are known as soft inquiries, which don’t affect your credit at all. Hard inquiries (also known as “hard pulls”) generally happen when a lender checks your credit while reviewing your application for a financial product.

Is Credit Karma a good place to get your credit score?

The credit scores and credit reports you see on Credit Karma come directly from TransUnion and Equifax, two of the three major consumer credit bureaus. They should accurately reflect your credit information as reported by those bureaus — but they may not match other reports and scores out there.

Is there a risk to using Credit Karma?

Is Credit Karma Legit and Safe? Credit Karma is considered a legitimate company that provides credit score information that is the same or close to your FiCO score. Your lender may use a slightly different credit score to assess you as a borrower, such as Experian data.

Does Credit Karma hurt your credit score?

Members can check their credit scores as often as they wish. Credit Karma allows you to check your credit report and score for free, without affecting your score. The service doesn’t hurt your credit score because it counts as a self-initiated inquiry, which is a soft credit inquiry.

Is Credit Karma a scam?

Credit Karma is considered a legitimate company that provides credit score information that is the same or close to your FiCO score. Your lender may use a slightly different credit score to assess you as a borrower, such as Experian data. How Does Credit Karma Make Money?

Can I compare Credit Karma Before applying for a credit card?

You can comparison shop on Credit Karma before you apply to get an idea of what type of card you’re looking for. If you have no credit history at all — or you’ve had trouble getting approved for an unsecured credit card in the past — consider applying for a secured credit card, which requires a security deposit.

Does Credit Karma use a different credit score model?

Credit Karma provides VantageScore 3.0 credit scores that are calculated by TransUnion and Equifax. But a credit card company will likely use a different scoring model altogether. There can be variation among credit scoring models and even among credit bureaus.