Matt at Prosper Lending Review has a great article on Credit Scores on Prosper.
He goes into various details, but the bottom line is that the average credit score and distribution of credit scores on Prosper is skewed to the low end of the scale compared to the national average.
In addition to the comparison that is made I would like to see a comparison against the loan distribution against the national average.
Some advise to borrowers on Prosper… Obtain a free credit report, make sure any errors are corrected, and if possible become current on outstanding obligations.
Here is a short exert:
I must say that when I came across this data I was quite surprised by this distribution. Matching the two sets of data together, we realize that E and HR borrowers combined represent only about 11% or 12% of the population (people below 520 cannot currently borrow on Prosper). Nearly half of the population falls into the AA or A credit groups.
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1 comment so far ↓
The author analyzes per current available listings instead of current loans as dollars per credit grades to reach a bogus conclusion. If you look at what distribution they should be look at (see below) you’ll find 65% of loans by dollar are C or high credit grades which roughly matches what the FICO distribution is. The listing may be skewed to the lower credit grades but actual loans aren’t which really shouldn’t be that surprising.
AA/A 27.7%
B/C 37.2%
D/E 26.8%
HR/NC 8.3%
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