Prosper loan question

[DaveInAZ]

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@Anonymous wrote:

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@Anonymous wrote:

"As a result of this transaction, I got an immediate 21 point increase in my FICO 8 score.    I got a 7 point increase just due to a balance inquiry on a Discover loan, and then another 14 points after I paid down half of my credit card balances."

Question for the forum: I've read over and over again that the consumer finance accounts (like one from Prosper, Lending Club, Best Egg, etc.) will cause a drop in score, so how is it an increase happened here? My husband and I have been looking at them, but not sure if a hit to our scores would be worth it...unless it was temporary...? 

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They don't necessarily cause a drop in score, that will vary by profile. But they are considered a negative factor and will show up as such in AA letters. Just got one of those myself. In the OP's case, though, the score bump was due to the drop in revolving credit utilization.

Here's my denial letter:

We also obtained your credit score from TransUnion and used it in making our credit decision. Your credit score is a number that reflects the information in your consumer report. Your credit score can change, depending on how the information in your consumer report changes.

Your credit score: 791

Date: 2015-06-17 13:33:31 -0500

Scores range from a low of 300 to a high of 850

Key factors that adversely affected your credit score: "Proportion of loan balances to loan amounts is too high,Time since most recent account opening is too short,Length of time revolving accounts have been established,Too many consumer finance company accounts,The number of inquiries on the consumer's credit file has adversely affected the credit score."

I have a Lending Club loan.

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Yeah, TU doesn't seem to hold Prosper/LC (aka per to peer) loans in high regard. I got a $5k Prosper loan last JUne, didn't drop my score but I saw that message in "key factors". I paid the loan off in March with a 0% BT from Barclays NFL card, enabling me to pay the BT off within the 15 months of 0% instead of the remaining 26 months on the Prosper 11% loan. So now instead "too many consumer loans" I get "loan balances too high", TU apparently bitterly disappointed that 6 months into 60 mo 1.99% car loan I haven't already paid half of it off. Like a good nagging spouse, TU is there.  

[Anonymous]

Is it always a negative factor or does it in any way depend on what the loan is for? I know most people use it to pay off debt but some use it to get a car loan.

If you have good credit you can get a pretty good interest rate. I am a lender on LC and I can see people with good credit getting cast loans at 5.33 percent.

Not convinced that should be seen as a negative.

[Revelate]

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@Anonymous wrote:

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@Anonymous wrote:

"As a result of this transaction, I got an immediate 21 point increase in my FICO 8 score.    I got a 7 point increase just due to a balance inquiry on a Discover loan, and then another 14 points after I paid down half of my credit card balances."

Question for the forum: I've read over and over again that the consumer finance accounts (like one from Prosper, Lending Club, Best Egg, etc.) will cause a drop in score, so how is it an increase happened here? My husband and I have been looking at them, but not sure if a hit to our scores would be worth it...unless it was temporary...? 

---

They don't necessarily cause a drop in score, that will vary by profile. But they are considered a negative factor and will show up as such in AA letters. Just got one of those myself. In the OP's case, though, the score bump was due to the drop in revolving credit utilization.

Here's my denial letter:

We also obtained your credit score from TransUnion and used it in making our credit decision. Your credit score is a number that reflects the information in your consumer report. Your credit score can change, depending on how the information in your consumer report changes.

Your credit score: 791

Date: 2015-06-17 13:33:31 -0500

Scores range from a low of 300 to a high of 850

Key factors that adversely affected your credit score: "Proportion of loan balances to loan amounts is too high,Time since most recent account opening is too short,Length of time revolving accounts have been established,Too many consumer finance company accounts,The number of inquiries on the consumer's credit file has adversely affected the credit score."

I have a Lending Club loan.

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And none of your other accounts qualify?  I have that too without a Lending Club loan and it's probably my lone retail card.

[Anonymous]

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@Revelate wrote:

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@Anonymous wrote:

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@Anonymous wrote:

"As a result of this transaction, I got an immediate 21 point increase in my FICO 8 score.    I got a 7 point increase just due to a balance inquiry on a Discover loan, and then another 14 points after I paid down half of my credit card balances."

Question for the forum: I've read over and over again that the consumer finance accounts (like one from Prosper, Lending Club, Best Egg, etc.) will cause a drop in score, so how is it an increase happened here? My husband and I have been looking at them, but not sure if a hit to our scores would be worth it...unless it was temporary...? 

---

They don't necessarily cause a drop in score, that will vary by profile. But they are considered a negative factor and will show up as such in AA letters. Just got one of those myself. In the OP's case, though, the score bump was due to the drop in revolving credit utilization.

Here's my denial letter:

We also obtained your credit score from TransUnion and used it in making our credit decision. Your credit score is a number that reflects the information in your consumer report. Your credit score can change, depending on how the information in your consumer report changes.

Your credit score: 791

Date: 2015-06-17 13:33:31 -0500

Scores range from a low of 300 to a high of 850

Key factors that adversely affected your credit score: "Proportion of loan balances to loan amounts is too high,Time since most recent account opening is too short,Length of time revolving accounts have been established,Too many consumer finance company accounts,The number of inquiries on the consumer's credit file has adversely affected the credit score."

I have a Lending Club loan.

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And none of your other accounts qualify?  I have that too without a Lending Club loan and it's probably my lone retail card.

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Nope, it's the only one. My other accounts are bank cards and a secured installment loan from a traditional bank. That consumer finance account note didn't show up until after the Lending Club loan hit my files.

[Revelate]

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@Anonymous wrote:

Nope, it's the only one. My other accounts are bank cards and a secured installment loan from a traditional bank. That consumer finance account note didn't show up until after the Lending Club loan hit my files.

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Huh, interesting.  Can you share the explicit reporting from the bureaus when you get a chance please?  Not third party sanitation like we get here or at CK, interested in this one.  Many thanks!

[Anonymous]

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@Revelate wrote:

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@Anonymous wrote:

Nope, it's the only one. My other accounts are bank cards and a secured installment loan from a traditional bank. That consumer finance account note didn't show up until after the Lending Club loan hit my files.

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Huh, interesting.  Can you share the explicit reporting from the bureaus when you get a chance please?  Not third party sanitation like we get here or at CK, interested in this one.  Many thanks!

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I would have to pony up for fresh reports since it hit after the last time I did. So, that'll have to wait until I feel the need to buy new ones.

[Anonymous]

CAPTOOL, how long did it take for Lending Club to show up on your file after you received your funds?

[Anonymous]

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@Anonymous wrote:
CAPTOOL, how long did it take for Lending Club to show up on your file after you received your funds?

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A little over two months.

[DaveInAZ]

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@Anonymous wrote:

I would have to pony up for fresh reports since it hit after the last time I did. So, that'll have to wait until I feel the need to buy new ones.

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I used to see the "too many consumer loans" message in my Fico report from my Walmart card, maybe it will show up in a Fico report on one of your CCs.