Good News for Prosper Lenders, Borrower’s Credit Rating Improving Over Time
Prosper CEO and Founder Chris Larsen reported that about 75 percent of all borrowers had AA credit when Prosper launched in 2006 and now almost 95 percent are in that AA category. With only 5 percent considered subprime borrowers, this is a positive trend for people looking for quality investments via peer lending.
The trend of borrowers with higher credit ratings on Prosper will hopefully translate to lower risk loans, and a decrease in the number of defaults. The more qualified borrowers there are, the more options that lenders have. Larsen speculates that the current credit crunch is making credit even more expensive for good customers and some of them are turning to Prosper for a loan.
Source: TheState.com: Anyone can be a banker with peer-to-peer lending
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