Pre-qualify on CreditKarma while under 21?

[Anonymous]

I feel like I've read before on here that credit karma prequalifications are useless..

[Subexistence]

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@Anonymous wrote:

But if the person is pre-qualified using VantageScore through CK, but the creditor uses FICO scores and the applicant doesn't have a FICO score to pull when the creditor tries to obtain one, wouldn't the applicant be denied?

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In this case we wouldn't know if the cc company would just use the vantage score or they will still only accept fico due to Vantage pre-qualify being relatively new. The only way to know is get someone with 5 month old history with CK prequals to try to apply for those preqaulification offers.

[Anonymous]

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@Subexistence wrote:

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@Anonymous wrote:

But if the person is pre-qualified using VantageScore through CK, but the creditor uses FICO scores and the applicant doesn't have a FICO score to pull when the creditor tries to obtain one, wouldn't the applicant be denied?

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In this case we wouldn't know if the cc company would just use the vantage score or they will still only accept fico due to Vantage pre-qualify being relatively new. The only way to know is get someone with 5 month old history with CK prequals to try to apply for those preqaulification offers.

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I've never heard of a credit card company using a different scoring model if there is no presence of a FICO score.

[Thomas_Thumb]

It is a standard practice in credit card decisioning. Discover card uses L2C which is able to generate a score based on utility and rent payment history.

Here is what Discover looked at when they granted DD a credit card with no "standard" credit history and no Fico score. As I recall her L2C score was 665 at the time.

[Anonymous]

So their own model, not VS 3.0 correct?

[Thomas_Thumb]

No L2C is a 3rd party credit scoring model that was developed specifically to score the "unscoreable".

The parent company that created L2C was an independent until late 2014 when it was acquired by TransUnion. 

An alternative product to L2C that was developed through some collaboration between with Fair Isaac and LexisNexis is Fico XD - it also targets those without "standard" credit histories.

TransUnion:  Link2Credit Thin File

"Back in June 2007, TransUnion, in partnership with L2C Inc., developed the thin file model named Link2Credit.  This model leverages information such as payday loans, rental payments, and debt information along with cellular plan data to develop an individual's credit score.  The model helps lenders predict the likelihood of a consumer becoming delinquent on payments and / or charge-off occurring in the next 12 months".

For additional (dated) info on L2C and competitive offerings check out this link:

https://s3.amazonaws.com/cfsi-innovation-files/wp-content/uploads/2017/02/05053225/The-Predictive-Va...

Fico XD appears to have been overshadowed by Fico 9 which also claims to be more inclusive.

[Anonymous]

So what I was getting at that you've more or less verified is that if someone applies for a pre-qualified offer through CK and that person doesn't possess a FICO score yet, their CK VS 3.0 score will not be used for the application as was suggested earlier by someone else.

[Thomas_Thumb]

CK has strong ties with TransUnion as evidenced by CK providing CBIS scores from TU and highlighting TU VantageScore 3.0 .

TU has a large portfolio of internally developed credit scoring models. It is hard to know the mechanics CK uses for pre-qualification which, as we know, is not the same as pre-approval. One option, used by Cap One for those new to credit, is TransUnion New Accounts 3.0. Not sure what Cap One does these days since their migration to VS 3.0. 

Certainly different criteria (and possibly credit score versions) are used for pre-qual vs approval. Frankly, I'm not sure that the CC compnies are directly involved in the majority of pre-quals. They likely give "partners", like CK, some general guidelines for screening and focus on approval after getting an application. 

Provided below is a link to a summary of TU scoring models. This document is from early 2015 - likely from from before the L2C acquisition integration (integration completed in 2016).

https://www.transunion.com/docs/rev/business/financialservices/FS_ModelsOverview.pdf

[sjt]

Thanks Thomas for the information. Its very interesting.

[Subexistence]

So TT, do you have any explanation for why those under 21 can slip under the age ban for pre-qualification?