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CreditKarma takes things beyond the pale


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Targeting CK for criticism is akin to proverbially shooting fish in a barrel:  It's excesses and the liberties it takes with credit facts are simply all over the place.  


Among the skeeviest practices in their repertoire (and not confined to CK) is to suggest a loan refinance, citing a huge monthly savings.  Typically the replacement loan is for a longer term, frequently at a higher rate.  The savings is merely achieved by stretching out the principal repayment.  There's never a comparison between total cost of the new loan vs the existing ... only the reduction in outflow over the current remaining term.


It's enough for me to cry out for a TILA disclosure requirement anytime someone cites anything to do with the cost/savings achieved through proposed financing.


So, it's a case of "seen that, gagged at that".  Yet, today, when I log into CK I see a loan proposition that takes this whole thing to a really obnoxious level:




So, the information on the left is for a loan I obtained through LightStream, $10k orig prin @4% with a 2-year term.  Stated info is accurate except for two things:  The March payment hasn't reported yet, so the outstanding balance reflects 19-mo of remaining payments.  And then there's the other thing ...


The appear to suggest that my best interests will be served if I refinance with another $1k cash out at a rate that's 2% higher.  They demonstrate this by citing $480 in lowered interest and "fees" vs my current loan.  Now, I've suggested they "never" compare the cost of the two loans, just the difference in monthly cash outflow.  So, this is better, right?


In the link on the previous page where I clicked to get this loan comparison, there was an added footnote to the effect of:  Current loan data assumes an 8% origination fee.  WTF.  Yep, the $1052 in interest and fees reflects $252 in prospective interest through scheduled payoff PLUS $800 the presume was charged and paid in cash at origination.


Now, there was no origination fee on this loan.  But they're telling me had there been, somehow I'm going to recoup that fee by refinancing into the proposed refinance???  They don't have a clue about "sunk costs"???


Of course, we don't really expect them to disclose that the new loan actually has $320 in added interest expense, more than twice what's payable under the current loan ... do we??

My reaction has previously been captured ...



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Ugh. I recently cancelled my CK account because of shenanigans like this, not to mention data/privacy concerns (I didn’t realize the sheer amount of ways they were using my info). 

CK alerts did lead me to realizing my identity had been stolen years ago (yay, Anthem breach), but I have much better free options today. 

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