In an ideal world, a white-hat would write a script that uses all of the hacked data to apply for the settlement on behalf of the hacked users so that the affected users don't have to individually work out how to hack Equifax's claims process.
I realize that's wishful thinking. Of course they're going to get away with paying what is effectively a parking ticket. Nor will any of their executives face any meaningful repercussions.
The hacking was done in court.
Credit Karma buys the data for their free product from Equifax. So if lenders look at Equifax (and they do) then that's the exact same data.
You might wonder, "But if their product is free and they spend money buying the data for it, how can that make financial sense?" and that's the thing most consumers don't understand. What's better than selling advertising? Selling actual _customers_. Nobody (to a first approximation) is looking at credit scoring because they're bored, they are looking because they want to borrow money - they are potential customers for a lender. So you sign into Credit Karma and it says you're doing well, and they suggest you could get this MegaBank Gold Card. In fact, they've checked and you'll definitely qualify, no risk. You sign up, and MegaBank give Credit Karma a bunch of money for _finding them a new customer_.
Well, sorta. Credit Karma uses VantageScore 3.0 (https://en.wikipedia.org/wiki/VantageScore), which is different from the various FICO offerings, sometimes substantially. VantageScore has four different generations.
FICO has over sixty variants - by credit bureau, relevant industry (there is, for example, a mortgage-specific calculation), and generation (FICO 8 vs FICO 9).
As a result, depending on what score offering they pull, your lender may see a number that's 100 points different than the one Credit Karma shows.
> So you sign into Credit Karma and it says you're doing well, and they suggest you could get this MegaBank Gold Card. In fact, they've checked and you'll definitely qualify, no risk.
This is another misconception. "Pre-approval" doesn't mean they actually ran the numbers; they just have stats on how many people with a similar VantageScore succeeded when they applied via CK's referral links. If you look closely, CK's "you're pre-approved!" tag actually has this disclaimer underneath it:
"90% of pre-approved applicants get this card. Approval not guaranteed; subject to checks."
In the UK there is no "FICO score" but consumers anyway believe a single three digit number "ought" to summarise their credit history and so the Credit Reference Agencies just make one up. I actually sat in on meetings when the rating were being changed where they argued about on the one hand a factor isn't relevant to most lenders any more, on the other hand consumers really _expect_ it to matter and are disappointed when it doesn't affect their score...
The intended consumers of credit data here all have proprietary algorithms to target audiences (rather than any of them relying on a simplistic "score") with a binary outcome, indeed your credit might be "too good" for some offerings. A card with 0% for 12 months is not aimed at people who'll use the card for 12 months then pay off the entire balance without flinching and walk away.
Definitely some of the offerings in the UK are approved based on knowing your _actual_ results in the proprietary algorithm because the card company is giving that algorithm (under legal agreement not to disclose it) to be used to ensure they only get given customers they'd accept. They're not "estimating" whether you'd be accepted. They don't want to waste their time on non-targets any more than the consumer wants to waste time applying for a card they won't get.
There will be some rate of non-acceptance for other reasons, but "not credit worthy" shouldn't be on the list, that's sort of the whole rationale for this business.
What is a "generation" here?
I would be curious to hear if people view Kredit Karma as trustworthy. I think I didn't understand their business model prior to reading this. Thanks
There's a pretty good comparison at https://www.creditkarma.com/credit-cards/i/vantagescore-30/ between VS 3, VS 4, FICO 8, and FICO 9.
> I would be curious to hear if people view Kredit Karma as trustworthy.
I strongly suspect their card/loan recommendations (where they make the bulk of their revenue) are intended to steer users into the ones that earn them the most commission. You'd want to go into it with eyes wide open and do a lot of independent research.
I should have qualified my question about the trustworthiness of Kredit Karma better. What I really meant to ask was are they trustworthy enough to hold one's data in exchange for using them as a monitoring service?