Why Credit-Pulls Databases Are Useless Time Wasters
Numerous websites, including CreditBoards.com, operate so-called credit-pulls databases. These forums include crowdsourced information about which credit bureaus different issuers check when evaluating applications, what credit scores are needed to obtain various credit cards and the spending limits people are approved for.
But such tools have a number of inherent flaws:
- Unvetted Users & Content: You don’t have to be a verified applicant or cardholder to contribute to these credit-pulls databases. As with all public online discussion forums, that means the “intel” they provide is fundamentally tainted by the possibility of a contributor’s dishonesty or biased point of view. The CreditBoards.com website, for instance, though well intentioned, does not specify a verification process for either the cardholder or the information a user supplies. Its Terms of Service in fact disclaims any responsibility for “the content of your messages, and the consequences of any such messages.”
- Underwriting Oversimplification: Credit-pulls database sites are supposed to help you predict your chances of credit-card approval. Instead, these tools send you on a wild-goose chase with the potential to cost you both time and money. That’s because the takeaways gleaned from the random collection of other consumers’ credit scores, application results and credit limits that these sites provide are more likely to foster false impressions and bad decisions than sound, money-saving choices.After all, do you honestly think that any group of individuals can reverse-engineer the secret sauce of some of the country’s most sophisticated lenders?
- Time Matters: The economic climate, the priorities and policies of financial institutions, and the financial performance of other consumers all evolve over time. So it’s entirely possible that the same applicant who got approved for a given account a year or two ago, for example, would be rejected today. And since the information on most so-called credit pulls-databases tends to be rather stale, misguided assumptions are bound to result due to the simple passage of time.
- No Two Lenders Are Created Equal: Each credit-card issuer takes a variety of variables into account for each applicant and prioritizes each element differently. So it’s not just a matter of having the same credit score or being in the same credit category (excellent, good, fair or bad) as someone else who got approved. You need to consider the type of credit score the lender used, for one thing, as well as the credit report it’s based on and the fact that multiple scores are commonly referenced.Even minute discrepancies in these underwriting ingredients can lead one lender to view your creditworthiness far differently than another. So the fate of your individual application is in the hands of the particular lender you’re working with at a given time.
There’s simply no way to get all of the information you need to make a truly accurate prediction from these credit-pulls databases. So why muddy the waters or lure yourself into a false sense of security?
A Better Approach
Given that the websites some people call “credit-pulls databases” are inefficient at best and dangerous at worst, you’re far better off allowing WalletHub’s sophisticated algorithms to identify the best offers that you can get approved for. Using data from your TransUnion credit report, we compare your current card’s terms to all other attainable offers in order to pinpoint the best savings opportunity. And when we find something worthwhile, we’ll notify you with a clear explanation of the potential upgrade, allowing you to quickly make a yes-or-no decision.
In other words, WalletHub cuts out the middle man, doing all of the legwork needed to find the best card for which you have a high likelihood of approval. Yes, we’re obviously biased when it comes to WalletHub’s superiority, but all we’re really saying is that it’s worth a shot. WalletHub is free, after all, and setting up an account takes only a fraction of the time you might otherwise spend hopelessly scouring a credit-pulls database.
For some outside perspectives on the usefulness, or lack thereof, of a credit-pulls database, we asked some money-management professionals to share their thoughts on the following questions. Check out who they are and what they had to say, below.
- Should consumers trust / rely on information from a so-called credit pulls database?
- What are the biggest problems with making financial decisions based on anecdotal, crowdsourced info?
- Is it possible for an individual to independently and accurately predict his or her odds of getting approved for a given credit card and receiving a certain spending limit? Is it worth trying?
Image: erhui1979 / iStock.
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