FICO Score Range

LendingClub doesn’t disclose the exact FICO score of a borrower, but instead group the scores in ranges. In October 2012 the ranges changed from 6 to 42, becoming much more granular. In Interest Radar, the available ranges to filter loans are 5: 660-679, 680-714, 715-749, 750-779, and 780+.

Debtors with scores lower than 660 are turned down by LendingClub.

In the mainstream credit industry, a FICO of less than 679 are considered below average, while above 750 are considered prime.

But in P2P lending, one must understand the average borrower coming to shop for credit is different. While there may be many creditworthy people hearing about P2P lending and coming for an unsecured loan with a 7% annual interest rate while they could obtain the same loan in a bank for a higher interest rate, there is a huge proportion of borrowers coming to P2P lending because they are being turned down for a new credit card. This means a completely different game when interpreting the FICO of a borrower.

For example, why would a 750+ FICO request an E-grade or less loan, with a minimum interest rate of 20.5%? There must be a reason for someone with such a pristine credit score to turn to the secondary market and be willing to pay over 20% interest rate. No wonder you get a loss rate of 8% when you invest in this kind of loan, while only 7% when you switch to less than 715 FICO.

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