peer to peer loans

[Anonymous]

You have a consumer finance account on your credit report.

Number of consumer finance accounts on your credit report
6 accountsOnly 12% of FICO High Achievers [?] have a consumer finance account.

Consumer finance companies typically grant loans to people with poor credit histories. Their customers often cannot get loans from traditional lending companies such as banks or credit unions. These are often high-interest loans because the consumer finance company is assuming more risk by lending to people with less than perfect credit.

The fact that you have a consumer finance company loan on your credit report means that you represent a higher risk to lenders than someone with no consumer finance loans. Even if this consumer finance account is closed, it will still lower your FICO score. However, its impact on your score will lessen as time passes.

What to do about this: You should try to stay current with all of your payments and avoid opening any new credit accounts that you don't need

I will never understand how the TYPE of credit you have represents anything about your risk. So, I got a loan and pay outrageous interest rate. I paid the loan back and never missed a payment. That makes me higher risk than someone who paid a cheaper interest rate? How so?

Message Edited by sidewinder on 04-17-2008 07:56 PM

[Anonymous]

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@Anonymous wrote:

It seems that FICO scoring dings you for a CFL. However, it is one of the minor things that hurts, IMO. I say this because under "What's hurting your score" this never even showed up on mine until recently, and I've had CFL for sometime.

Normally, it is the high credit risk borrowers who get CFL. So, the score model stereotypes and says everyone who gets a CFL must be high risk so we are going to ding your score for having one. (kinda joking.....but almost true)

However, having the TL and the good payment history outweighs the bad, I"m sure.

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\Also...My loan hasn't started reporting yet, so I can't say from experience... I have heard different things about how it reports; CFL and installment loan... I'll report back once mine starts reporting...

[modernsurrender]

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sidewinder wrote:

What to do about this: You should try to stay current with all of your payments and avoid opening any new credit accounts that you don't need

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LOL, the advice made me chuckle, it does seem silly to be dinged for the type of loan, but I guess it makes sense.  I don't have much to lose though if I do get one, I'd have to say the chance of getting some baddies removed, or stopping them from popping up, and the ability to build more good history would outweigh a little ding in the long term.

[Anonymous]

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TracyFace wrote:

\Also...My loan hasn't started reporting yet, so I can't say from experience... I have heard different things about how it reports; CFL and installment loan... I'll report back once mine starts reporting...

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CFL don't have a "special" section like installment, open, revolving, etc. Something about the way it is coded points out to the scoring model it is a CFL.

[Anonymous]

Installment Accounts: Accounts comprised of fixed terms with regular payments

PROSPER  Account No.: 1940* 1940*    Condition: Open Open   Balance: $2317 $2317   Type: Unsecured loan Unsecured loan   Pay Status: Current Current  

[Anonymous]

That's my report on true credit shows as installment from Prosper.

A little birdie told me that they can get me a credit for a referral woohoo!

[fused]

Propser is a great alternative to banks and CUs. Loans can be had for all risk groups, not just the AAs or the HRs (high risk). They use EX's Scorex PLUS^SM model which is different than the standard Plus scoring. Currently, they pull softs and hards with EX only and report to EX and TU. IMHO, either the scoring model they use if flawed or the info uploaded on the loans up for bid is incorrect. I have seen numerous listings with AA (score of 760+) and A (720+) grades with several unpaid, serious derogs that are recent. Other than this, I have no beef with Propser. For those of you who are interested in a Propser loan, pay very close attention to detail. Lenders will ask questions, be open and forthcoming and you will have a greater chance of your loan funding.

[Anonymous]

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fused wrote:

Lenders will ask questions, be open and forthcoming and you will have a greater chance of your loan funding.

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VERY true.....

also, don't use the auto fund feature...it scares people...I heard a stat that 31 percent of people who use autofund default on the loan.

[Anonymous]

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MinnesotaJ wrote:

also, don't use the auto fund feature...it scares people...I heard a stat that 31 percent of people who use autofund default on the loan.

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Bear with me.  I'm completely ignorant about prosper.

What is the autofund feature?

[Anonymous]

You have two choices...when you list you pick an APR and amount....people can then bid on that amount and apr....

Choice one is to wait up to 7 days....lets say you listed at 15% and it was funded in 2 days...people can continue to bid at a lower APR...and if enough people filled the bid at 14% you would get that rate...you can choose to close early if you like anyway...

Choice 2 is autofund....when your loan is full and funded at 15% it automatically closes and they send you a electronic deposit...  this shows desperation and time sensative