On Prosper the borrower’s income matters, even if it is only stated income…
Prosperous Land did a very interesting analysis on borrower income: It’s All About the Income…
His conclusion (only being able to use 6 months of data as that is all that exists), when income is not stated or less than 25K that is equivlanet to increasing the credit grade by an entire grade.
While this isn’t enough information to predict default rates, it’s a clear indicator that a verified income is equivalent to elevating the borrower by one credit grade for all but the best borrowers (or, conversely, not having verified income is equivalent to a drop of one credit grade).
Very Interesting, I look forward to following this analysis as more data is available.
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2 comments ↓
It’s not just stated income. It’s stated for the listing, but Prosper verifies the income before the loan funds (I suspect this is the reason for all the canceled loans).
Mike
Actually, I think they only verify income that doesn’t match the debt level. More of an audit technique than verifying each and every borrower.
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