Micah Abigail CEO, founder and financial influencer Micah Smith talks with Fox News Digital about the crippling finances and how to fix it.
As technology advances, various tools have been created to help people with low credit scores or limited credit history earn credit. Often called “fintech,” these tools are being scrutinized by Congressional Democrats and regulators such as the Consumer Financial Protection Bureau (CFPB) and the Federal Communications Commission (FCC).
Comparative shopping tools such as Credit Karma, Nerdwallet, Wallethub, Lendingtree can give people a better chance to get loan or credit card approval.
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Washington, DC, Consumer Financial Protection Bureau (CFPB) Headquarters (Photographer: Getty Images/Samuel Colum via Getty Images/Bloomberg)
Credit institutions like Experian also offer similar options, including what is called the “No-Ding Decling” option. Customers are allowed to apply and will not affect their credit score unless the application is approved.
D-Ill. , D-Ill. Retired Senators and D-Mass. Democrats such as Senator Elizabeth Warren have allegedly used deceptive tactics and other measures to lead consumers to more “predatory” lending options. The CFPB sought to implement regulations to eliminate practices that are deemed abusive or predatory, despite platforms such as credit karma revealing how compensation from advertisers affects the order in which they are delivered.
However, a new study from the Southwest Public Policy Institute (SPPI) found that comparative shopping tools and lead generators allow consumers to make more informed choices. The report determined that government intervention could be harmful to people who have difficulty obtaining credit.
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The title, titled “Swipe Right: How Comparative Shopping Tools and Lead Generators Revolutionize Consumer Access to Products and Services,” details the efforts of Patrick Brenner, founder and president of SPPI, earning credits after divorce.
This report details how Brenner applied directly to seven credit cards through various websites such as Wells Fargo, Capital One, and Discover. All the effort was time-consuming, often confused, and in the end everything failed. However, when he used the tools offered by Credit Karma, he matches the offer from Merrick Bank, with the $500 limit doubled to $1,000 after seven months of payments.
The CFPB has created a tool for people to search for possible credit cards. However, unlike the comparative shopping tools available on mobile phones, the CFPB website only offers fees and fee disclosures. Anyone who wishes to apply for a card must move to a bank or credit union and apply in person. There are no indications of possible approval.
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Sppi says such efforts are pointless. The report states, “Imagine inefficiency. Government agencies need help with bloated processes, outdated technology, and lack of user experience. When developing comparison tools, they will compete directly with very sophisticated systems that have improved algorithms and user interfaces over decades.
Woman holding a smartphone with credit karma logo displayed on screen. (Photo illustrations by Rafael Henrique/Sopa Images/Lightrocket via Getty Images)
The report concludes with a warning about possible overregulation and oversight.
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“Policymakers must recognize that these platforms offer important alternatives to traditional banking, especially for those who are not accessible by traditional means. They should focus on storing dynamic markets and tools for informed decision making that consumers can choose.”
