For example, relative to higher-income neighborhoods, lower-income areas tend to have fewer home sales and more-diverse housing structures, making accurate appraisal more difficult 4 . Similarly, credit evaluations tend to be more costly for lower-income borrowers, who are relatively more likely to have short or irregular credit histories.
5 Informational barriers to lending were heightened by the absence of uniform national depositories of information on the credit experiences of consumers; at the time, the credit-reporting system consisted of hundreds of local credit bureaus, each of which maintained limited information on local residents.