Does Zip Code Really Matter?

[heychrisbaker]

Hi All:

I'm wondering if one lives in a 'nicer' zip code does it effect getting higher credit limits and/or pre-qualified apps from credit card companies? 

[jacetx]

No (it shouldn't?) because that would be lending discrimination. 

[Anonymous]

ZIP code only matters as a method of identification.

[heychrisbaker]

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@Anonymous wrote:

ZIP code only matters as a method of identification.

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What do you mean by "identification"?  

[Anonymous]

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@jace8602 wrote:

No (it shouldn't?) because that would be lending discrimination. 

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This is true....and messed up...

If it were, then CCCs wouldn't tell us that..

[UncleB]

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@jace8602 wrote:

No (it shouldn't?) because that would be lending discrimination. 

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It definitely shouldn't, but a few years ago Amex was caught doing just that... and they would even state as much in the CLD letter.  Supposedly their 'discrimination' was based more on the ZIP code of the stores you shopped at (not necessarily where you live) but who knows.

Here's a link to a story from 2009; if you check google you'll find others:

http://abcnews.go.com/GMA/TheLaw/gma-answers-credit-card-companies-financially-profiling-customers/s...

[Anonymous]

Better not be. Discriminatory and like the early 50's Welcome Wagon.

Only matters for taxes. 

[fury1995]

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@Anonymous wrote:

Better not be. Discriminatory and like the early 50's Welcome Wagon.

Only matters for taxes. 

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Which originally was Retailer's credit aka Equifax. Scary history there...

[Anonymous]

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@Anonymous wrote:

Better not be. Discriminatory and like the early 50's Welcome Wagon.

Only matters for taxes. 

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Given the sophisticated risk management algorithms practiced by Amex in particular but by all lenders, I would be amazed if it wasn't one of the many factors used to determine risk (and thus CL and APR).

If the zip code was used as a proxy for race, for example, then there could be issues, but if they can claim that experience shows that customers in this zip code tend to have a higher default rate, maybe that can pass scrutiny

[Anonymous]

Scary.  Really scary.  I've read about another topic, the study of races and upper colliegate graduation rates.  Made me think of that.  

IF the theory was true, then AmEx should be banging on my door soon with elevated CL's as I live in a higher pay scale neighborhood.  I'm in a shack, but my zip code isn't. 

Real fine line in profiling people.  Gets my hairs raised. 

I say taxes, as I see auto shopping often asks for my zip code. 

Ugh. Heebie Jeebies!