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Ask HN: Is there evidence that hard inquiries increase income inequality?
Hard inquiries (like ones done during loan applications) hurt your credit score by a few points. Is there any substantial evidence that this makes poorer people poorer, since if they get rejected, it makes them look like a worse borrower and a vicious cycle can start? I'm curious if this actually has any statistically significant effect and couldn't find an answer with a quick google.
- uberman 6y agoGetting rejected does not impact your fico score, though the inquiry will for a limited time.
- sushshshsh 6y agoI don't believe the rejection would be added to your credit report. The single inquiry would decrease your score by 1-3% for a month. It's a very small amount, but maybe it compounds if you are making 20 loan applications or something like that. What really hurts applicants is when a loan company asks about things outside of the credit report that you are legally compelled not to lie about, such as "Have you EVER been bankrupt?" even if it was 20 years ago.
- davidajackson 6y agoI see, the latter things you mention seem like they would increase inequality. Quick question, according to: https://www.credit.com/blog/how-long-does-negative-information-stay-on-my-credit-report-65360/ https://www.credit.com/blog/how-long-does-negative-informati... it's a year. Curious to hear where you heard the month length of time?
- sushshshsh 6y agoHmm interesting, I've always heard from the employees who are trying to get me to sign up for some quote or loan or offer (they're biased yes) that it is only "a month or two". In my anecdotal experience, I only have one credit line (a $5,000 credit card), I make a big city software engineer's salary and I have no adverse events on my credit, no wife and no kids. My credit score is provided to me every month by my bank as a freebie, and it has fluctuated seemingly randomly between 785 and 815 for years now.