Question About Apps Like Credit Karma and Nerd Wallet

[elboullee]

I have a question about credit/credit card apps like NerdWallet and WalletHub and in particular Credit Karma.

I of course know that these are for-profit businesses, and that various credit card issuers pay them to push their particular products.

But my question is, are the approval odds they show purely about whomever is paying them right now, or is there a real, underlying creditworthiness algorithm at work?

Take Credit Karma, for example. If I go on their site right now, they tell me that I have an "outstanding" chance of being approved for basically every American Express charge card [Amex tells me this as well], Delta SkyMiles cards, and all of the US Bank cards.

But they also tell me that I have a "poor" chance of being approved for all of the Credit One cards, most of the Capital One cards, and also the Discover cards, including the secured ones. All of which I find particularly curious considering that I have had the regular Discover It and Capital One Quicksilver cards for nearly a year now and Credit One sends me at least two "preapproved" mailers every week. And my FICO scores have all gone up by about 50 points since I first got the Discover and C1 cards.

There doesn't seem to be any rhyme or reason to any of it beyond, for example, "Amex is paying us to push the their cards this month..."

Thoughts?

[PNWRambler]

The "odds of approval" is a guideline or estimate based on how your credit profile compares to other Credit Karma members who were approved for that card. They're basically just correlations, no guarantees.  There may be some marketing behind it as well, I'm not sure about that.  

[elboullee]

Sure, and I understood that when I read it on their site.

But I am less curious about the cards that I don't have for which they say I have "poor" approval odds and much more curious about the cards that I already have, and have had for a year, for which they also say I have "poor" approval odds.

Considering my scores then [high 600s], my scores now [mid 700s], income approaching six figures, and my overall profile [no negatives of any kind], I'm trying to imagine the kind of "correlation" that results in a "poor chance of approval" for the Discover It, Credit One $300 SL/$99 AF, and QS Secured yet "outstanding" odds for the Amex Gold and Plat, Hilton Honors, and the USBank Go and Cash+.

As I am currently gardening for the next 3 to 4 months, I'm not worried about applying for any particular card. I was just genuinely curious about how their algorithm, such as it is, works.

[GZG]

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@elboullee wrote:

But my question is, are the approval odds they show purely about whomever is paying them right now, or is there a real, underlying creditworthiness algorithm at work?

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probably like 80/20 

I had a week with "outstanding" odds for the Sofi card and now I'm back to poor odds. 

My Citi odds flucate from poor to very good on a near weekly basis. 

Cards come and go and odds change wildly without any changes to the current credit pulls they've done. 

I'm sure they at least try to ensure that people with 500 credit scores aren't applying for the Venture X, I'm sure the advertising dollars go much further than the actual credit profile when it comes to the suggestions. 

I'm sure their suggestions are tailored to maximise their referral dollars as opposed to ensuring you get the best card for you

[Aim_High]

I think those approval odds are basically garbage and likely marketing-related.  I laugh when I get high approval odds for starter or subprime cards.  And I often see cards that I already have (or was just approved for) show up in my suggested cards.  Why would they think I need another of the exact same card?  Obviously, not serious suggestions for those who know anything about credit; therefore, marketing. 

[elboullee]

Just for laughs, I went back and checked Credit Karma again today.

Still have "outstanding odds" for the AMEX Platinum, Amex Gold, SkyMiles Reserve, SkyMiles Platinum, SkyMiles Gold, and the US Bank cards.

Also still have "poor odds" for the Discover It and the Petal 1. But now I also have "poor odds" for the Mission Lane non-cashback card, the SkyMiles Blue,  and the AMEX Green.

LOL!

No actual credit worthiness algorithm can explain any of that. It has to be down to just pure marketing.

[OmarGB9]

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@elboullee wrote:

Just for laughs, I went back and checked Credit Karma again today.

Still have "outstanding odds" for the AMEX platinum Amex gold, SkyMiles Reserve, SkyMiles platinum, SkyMiles gold, and the US Bank cards.

Also still have "poor odds" for the Discover It and the Petal 1. But now I also have "poor odds" for the Mission Lane non-cashback card, the SkyMiles blue,  and the AMEX green card.

LOL!

No actual credit worthiness algorithm can explain any of that. It has to be down to just pure marketing.

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Hence why we always say around here to ignore CK's "approval odds" and even their scores (Vantagescores, which basically no lender uses), and only use CK to monitor changes to your EQ/TU reports.

[markhs777]

For entertainment purposes only.

[FireMedic1]

I can get just about any top teir card via CK. But they wont give a BK'er a card until it falls off my reports. And they list my public record on their reports. But I'm good to go they say. Yeah right. Insta-Denial.