Re: LIVING IN CERTAIN STATES INCREASE ODDS 4 PRE-APPROV
11-15-2012 08:45 PM
I was thinking about a question the other day in regards to the influence living in a particular state might play in credit approvals.I have noticed that certain states have a population with better credit scores compared to state X. I wonder if credit card companies look at certain data and are more aggressive and willing to extend credit to state X than to state Y? What do you think?
I doubt it seriously; pre-approvals are based on what's in one's credit reports and the address on them is often out of date. Granted it's only a small minority of the population that leaves the state they grew up in (or even the same town) but redlining based on state really doesn't make any sense as a business practice when you have much better data in hand to go off of.
The answer to the title of the post is yes. If you live in a state with better credit the % of the population who will recieve pre approvals is higher because there are simply more people with higher scores.
Issuers spend a lot of money on pre approvals and modeling to send them to the correct people. If you have charge offs and collections you won't see soft pulls from Amex, Chase, etc.
These companies only soft reports that fit their criteria they purchase multiple reports at a time (meaning statistically they are purchasing more from those with higher scores). Things like projected income based on modeling are far more important to a pre approval than the state.
Any state bias is an effect of demographics not a cause.