Real world - FICO04 impact from adding a Prosper or Lending Club loan?

[spongenotbob]

Hello all,

 

I'm seeking any real-world, first-hand experiences with adding a Prosper or Lending Club tradeline to your credit report. What was the FICO impact - if any?

 

In theory, since it's an installment loan, should have minimal impact (other than AAOA). But, I've been surprised before... hopefully it's not considered a "finance company" loan...?

 

Would love to hear some actual experiences - did you get any immediate FICO movement as soon as the P2P tradeline posted?

 

Thank you CB!

[codein]

I saw minimal, if any, effect on my fico/fako. I would not recommend getting a prosper or LC for credit score building purposes, but get one because you need it (loan consolidation, etc...). It shows as an installment loan. It is also listed as unsecured. In theory, adding an installment loan should improve your credit MIX, assuming you never had an installment loan. Your credit mix, is good for your credit score. I believe that Prosper is Experian only and I know that LC is soft Transunion only.

[spongenotbob]

I saw minimal, if any, effect on my fico/fako. I would not recommend getting a prosper or LC for credit score building purposes, but get one because you need it (loan consolidation, etc...). It shows as an installment loan. It is also listed as unsecured. In theory, adding an installment loan should improve your credit MIX, assuming you never had an installment loan. Your credit mix, is good for your credit score. I believe that Prosper is Experian only and I know that LC is soft Transunion only.

 

Thanks for the report.

 

I'm in a niche situation ... I need to temporarily bump my FICO04 about 30 pts for a mortgage refi ... my hope is to use the P2P loan to convert a big chunk of revolving debt into installment (enough to push my utilization below 30%), do the refi, and then unroll it. FICO04 so it's all about revolving balances - for my scorecard anyway.

 

Keep the reports coming.....

[codein]

For your niche situation, it just might work. Keep in mind, that the funding/disbursement process for LC is very fast. 2-5 days from app to money in the bank. NOW...it takes 2-3 months for the LC loan to report on EXP and TU and about 6 months for it to report on EQ. If you could time your mortgage app for the ~2month delay before LC reports on your CR, that may be beneficial. LC only ever does softs, so the mortgage app is not going to know that you just opened up an installment loan if it hasn't reported yet. You would also have to pay down your revolvers and have that show on your CR, which could take a month too.

 

And also, YMMV on when the LC loan reports, but it appears to not report right away. For me, it did not report for ~10 weeks.

 

Of course, if the mortgage app is looked over very carefully, they will look at the historical payments on your revolvers and match that up with your bank account statements and wonder...'how did these credit cards magically get paid down? where did the money come from?' I don't think they would use a fine tooth comb like that, but who knows.

[shifter]

they only source the DP money.

 

they don't really care where money came from to pay down CCs.

[Demonico]

they only source the DP money.

 

they don't really care where money came from to pay down CCs.

True, but they will look at the LC/Prosper for DTI. If you were to try and time it during the period between dispersal and reporting and it shows up later w/o you telling the lender that could throw a red flag for an u/w.

[shifter]

yes, it's definitely not a good idea not to disclose the LC for DTI purposes even if it's not reporting yet.

 

but assuming you have DTI to work with, the score boost due to lower util is well worth it.

[spongenotbob]

Thank guys. Lots of good advice here. I am giving my mortgage broker full disclosure ... he is well aware of situation and he's totally fine with it, as long as he gets his score.

 

I will declare the additional monthly payment for DTI purposes. I probably won't wait for the LC loan to show up on my credit reports (opportunity cost too high), but we'll see about that.

 

Thanks again!