Are Online Credit Card 'Approval Odds' Accurate?

Many credit monitoring services (CMS) and financial websites display "approval odds" (e.g., Excellent, Good, Fair) for various credit cards, or suggest cards that are "recommended just for you." It's easy to assume that because these sites often have access to your credit report data, their recommendations must be accurate and in your best interest. However, this is a common misconception.

It's (Mostly) Marketing

The primary driver behind these "approval odds" and recommendations is often marketing and affiliate revenue. These platforms frequently partner with credit card issuers and receive a financial kickback when you click on their links and apply for a card (especially if you're approved). Their goal is to encourage applications.

While they might use some basic elements of your credit profile (like your VantageScore 3.0 from Credit Karma) to categorize offers, these "odds" are not a guarantee of approval and can be highly misleading.

Why "Approval Odds" Can Be Inaccurate

1. Ignoring Lender-Specific Criteria: Each credit card issuer has its own underwriting rules and criteria that go far beyond a simple credit score. These can include:

   • Income levels and debt-to-income ratios.
   • Specific rules like Chase's 5/24 rule (denial if you've opened 5+ cards from any bank in the last 24 months).
   • Relationship with the bank.
   • Number of recent inquiries or new accounts.
   • The overall health and specifics of your credit profile (not just the score). Online "approval odds" often don't, or can't, factor in all these nuanced, lender-specific requirements.

2. Based on Less Relevant Scores: As discussed in other myths, sites like Credit Karma primarily show you VantageScore 3.0 scores, which are rarely the scores lenders use for decisions. A "Good" VantageScore doesn't mean you'll meet the FICO score threshold a lender might have.

3. Profit Motive Over Precision: The incentive is to get you to apply. If showing "Excellent" odds for a card (even if not entirely accurate for your specific profile) increases clicks and applications, the platform benefits financially. Credit Karma, for instance, paid a $3 million FTC settlement related to deceptive "pre-approved" claims, highlighting the potential for misleading practices.

4. User Experiences: Thousands of user reviews and forum posts attest to being denied for cards despite having "Excellent" or "Good" approval odds from these platforms, often resulting in a "wasted" hard inquiry.

What Users Have Noticed

• Recommendations for Existing Cards: Users sometimes get recommendations for cards they already possess, indicating a lack of sophisticated matching.
• Generic Tiering: Recommendations might simply show the "next best thing" based on a score range, rather than a deep analysis of your profile's suitability for that specific product. For example, if you have a starter card, they might push the next tier up from the same issuer.
• Inconsistent Offers: Some users with strong profiles still receive offers for subprime cards alongside premium cards, suggesting the targeting isn't always precise.

A Better Approach

• Use Lender Pre-Approval Tools: Many major banks (Chase, Amex, Capital One, Discover, etc.) offer their own pre-approval tools on their websites. These are generally more reliable as they use the bank's own initial screening criteria, often with a soft pull that doesn't hurt your score.
• Research Card Requirements: Look for data points online (e.g., on Reddit forums like r/CreditCards, myFICO forums) about typical approval profiles for cards you're interested in.
• Understand Your Own Profile: Know your FICO scores (especially FICO 8 and any relevant industry-specific scores), your income, your debt-to-income ratio, and any potential red flags on your report.

Conclusion

Online "approval odds" from third-party credit monitoring sites should be taken with a very large grain of salt. They are primarily marketing tools designed to encourage applications. While they might offer a very rough starting point, they are not a reliable indicator of your actual chances of approval and should not be the sole basis for your application decisions. Rely more on lender-specific pre-approval tools and a thorough understanding of your own credit profile.