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Credit Cards

Did Credit Karma pre-approve you for a credit card? You could be owed part of a $3 million settlement

The Federal Trade Commission says Credit Karma misled applicants and may have lowered their credit scores.


The Federal Trade Commission has started the compensation process in a $3 million settlement with Credit Karma, which the agency alleges deceived customers about being approved for credit cards.

Between 2018 and 2021, Credit Karma sent out offers telling consumers they were "pre-approved" or had "90% odds" of being approved for credit cards and loans from lenders that promoted their financial products on the company's website.

However, according to the FTC, many of those individuals were denied credit and, as a result, "wasted time applying and saw their credit scores drop when companies denied their applications."

In January, the FTC finalized a settlement with Credit Karma, requiring the company to pay $3 million and "halt deceptive 'pre-approved' claims." The commission is sending out notices with claim IDs to nearly 500,000 people who may have been impacted.

In a statement to CNBC Select, a Credit Karma spokesperson said the company "fundamentally disagree[s]" with the FTC's allegations, "which relate solely to statements we ceased making years ago."

"Credit Karma is not a lender and does not make lending decisions," the representative said, adding that customers using the site "have a significantly higher approval rate than the national average."

Find the best credit card for you by reviewing offers in our credit card marketplace or get personalized offers via CardMatch™.

How do I file a claim in the Credit Karma settlement?

If you were denied credit after responding to a message from Credit Karma between 2018 and 2021 you may be eligible for a portion of the $3 million settlement. Check for a letter or email from the FTC that contains your claim ID and submit your claim by 11:59 p.m. PT on March 4, 2024.

You can visit ftc.gov/CreditKarma for more information or call the claims administrator at 866-848-0871.

What does pre-approval mean?

When an individual is pre-approved for a line credit, it means a lender has reviewed their financial situation and decided they meet at least some of their criteria. However, "getting a pre-qualification or pre-approval letter is generally not a guarantee that you will receive a loan from the lender," according to Equifax.

The process usually involves a soft credit check from one of the three major credit bureaus and typically won't affect your credit score.

Learn more: How to improve your odds of getting approved for a credit card

How to find the best credit card offers

You can review offers on your own on CNBC's credit card marketplace, which allows you to compare rates, requirements, rewards and other information on dozens of cards.

The CardMatch™ tool works by taking some basic personal information that helps match you with some current card offers that you might be eligible for, sometimes better than what's publicly available. Keep in mind these offers do not guarantee approval. While CardMatch™ does a soft inquiry on your credit history, it won't impact your credit score.

If you're worried about getting approved for a credit card, you may want to think about one with a lower credit score requirement: The Discover it® Secured Credit Card was our top pick for cards for those with bad credit. It has no annual fee and, as a welcome bonus, Discover will match all the cash back you've earned at the end of your first year.

Discover it® Secured Credit Card

On Discover's secure site
  • Rewards

    Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter, automatically. Plus earn unlimited 1% cash back on all other purchases.

  • Welcome bonus

    Discover will match all the cash back you've earned at the end of your first year

  • Annual fee


  • Intro APR

    N/A on purchases

  • Regular APR

    28.24% Variable

  • Balance transfer fee

    3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*

  • Foreign transaction fee


  • Credit needed

    New / Rebuilding

  • *See rates and fees, terms apply.

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Bottom line

While being pre-approved for credit is an indication you're in good financial shape, it's never a guarantee. If you were denied credit after responding to a pre-approval offer from Credit Karma, you may be eligible for a portion of the settlement.

Why trust CNBC Select?

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

Catch up on CNBC Select's in-depth coverage of credit cardsbanking and money, and follow us on TikTokFacebookInstagram and Twitter to stay up to date.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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