New Credit Karma program pre-approves borrowers without dinging their credit

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Applying for a new line of credit has always been a double-edged sword: On the one hand, consumers stand the chance to gain more borrowing power, but on the other, their credit score can be negatively impacted. A new program from Credit Karma may offer an appealing middle ground.

Known as a site that offers consumers free credit reports and scores, Credit Karma’s bottom line depends in part on its partnerships with credit card companies. A new program, called Marketplace, allows Credit Karma users to know whether they’re pre-approved for a credit card or loan without it dinging their credit.

Marketplace: Credit Karma program bypasses the credit bureaus to pre-approve borrowers

Credit Karma Marketplace shows members the “credit cards and loans they’re pre-approved for, helps them compare options and make it easier to apply — without impacting your credit,” Credit Karma spokeswoman Emily Donohue told Team Clark in an email. The program went live this week.

The Marketplace is a logical progression for Credit Karma, which has long shown its users their approval odds for credit cards based on your personal data.

New Credit Karma program pre-approves borrowers without it affecting their credit
Photo credit: Creditkarma.com screenshot

Now with loans and other products added into the mix, this has the potential to be a game changer for consumers who are gun-shy about applying for credit cards because they don’t want their credit scores to go down. Marketplace allows Credit Karma, 80-million members strong, to flex its considerable muscle in the credit-preapproval realm without the involvement of the credit bureaus.

Aside from pre-approving customers for credit cards, the company sees Marketplace as a personalized shopping hub, where people can know beforehand whether they will be able to borrow money for certain products.

“The decisioning is housed at Credit Karma instead of having members’ data shared with a financial partner,” Donohue said.

Money expert Clark Howard has long been a proponent of taking advantage of Credit Karma’s free credit reports and credit monitoring service.

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