A new report details how comparison tools from Credit Karma benefit consumers

As technology has progressed, various tools have been created to help people with a reduction in credit ratings or limited credit history to obtain credit. These tools, often called “Fintech”, were examined by Congress Democrats and regulatory organizations such as the Consumer Financial Protection Bureau (CFPB) and the Federal Communications Commission (FCC).
Comparison tools, such as Credit Karma, Nerdwallet, Wallethub and Lendingtree, can give people a better chance of being approved for a loan or credit card.

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Credit agencies, like Experian, also offer similar choices, including what they call an option to “decline without ding”. Customers can apply and there is no impact on their credit scoring unless the request is approved.
Democrats such as the retirement of Senator Dick Durbin, D-ill., And senator Elizabeth Warren, D-Mass., Confirm that they use misleading tactics and other measures to direct consumers to more “predatory” loan options. The CFPB has attempted to implement regulations to eliminate practices deemed abusive or predatory despite platforms like Credit Karma and others which disclose how advertisers’ remuneration can influence the order of product offers.
However, new research from the Southwest Public Policy Institute (SPPI) has revealed that comparison tools and lead generators allow consumers to make more enlightened choices. The report determined that government intervention could be detrimental to those who have trouble obtaining credit.

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Entitled “Swipe to the right: how the comparison purchasing tools and head generators are revolutionizing access to consumers to products and services”, the report details the efforts of the founder and president of SPPI, Patrick Brenner, to obtain credit after his divorce.

The report details how Brenner asked directly seven credit cards via various websites such as Wells Fargo, Capital One, Discover and others. All efforts took time and often confusing, and ultimately all failed. However, when he used the tools provided by Credit Karma, he was twinned with a Merrick Bank offer for a credit card with a limit of $ 500 which would double at $ 1,000 after having made payments in time for seven months.
The CFPB has created a tool so that people are looking for possible credit cards. However, unlike comparison of comparison that can be used on your mobile phone, the CFPB website only makes disclosure on costs and prices. Anyone who wishes to request a card must navigate to the credit bank or cooperative and apply directly. There is no indication of the chances of approval.

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SPPI says these efforts are useless. The report indicates: “Imagine ineffectiveness: government agencies need help for swollen processes, obsolete technology and dull user experiences. If they had to develop a comparison tool, they would rivalize directly with highly sophisticated systems that have refined their algorithms and user interfaces over the decades.

A woman holding a smartphone with the Karma credit logo displayed on the screen. (Illustration Photo of Rafael Henrique / Sopa Images / Lightrocket via Getty Images / Getty Images)

The report ends with a warning regarding possible overregulation and surveillance.

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“Decision -makers must recognize that these platforms provide vital alternatives to the traditional bank, in particular for those who do not have access by conventional means. The emphasis should be placed on the preservation of a dynamic market where consumers have the freedom to choose and the tools to make informed decisions.”