Lending Club Blog

New FICO Rules May Benefit Peer-to-Peer Loan Borrowers

We all know how consolidating debt with a person-to-person loan can help to save you money and get you out of debt more quickly. New FICO scoring rules may provide an added benefit to peer-to-peer loan borrowers: a boost in their credit score.

In their March 2008 issue, Money magazine reported that Fair Isaac, the company whose formula determines your credit score, is updating that formula. There were a few areas where this update could affect your credit score. One area in particular, having a few kinds of credit, could favorably impact everyone with a peer-to-peer loan.

As a result of this update, having an installment loan, like a P2P loan from Lending Club, in addition to other forms of credit, like credit cards, could give your score a boost. Having these multiple types of credit, along with making regular payments and maintaining low balances was reported to raise credit scores by as much as 25 points.

By consolidating debt with a peer-to-peer loan, you are not only taking on a different kind of debt, but you will also be able to maintain a low balance on your credit cards. You’ll be making monthly payments to your loan, so that criterion will be met as well. As you pay off your loan, you will be lowering your credit utilization, which could help your score even more.

It is expected that these changes may take some time to be adapted by the three major credit bureaus. In the meantime, you can rest assured that your peer-to-peer loan may be helping you in more ways than you expected.

Monday, April 28th, 2008 at 6:30 am

Comments (0)

  • Archives z

Recent Posts

We went public today!

Ringing the bell this morning at the New York… Read More »
December 11, 2014

New and Improved Statistics Page

We recently redesigned our Loan Statistics page to make… Read More »
November 13, 2014

Lending Club Honored with Economist Innovation Award

This month I was honored… Read More »
October 15, 2014

Finding the right company culture for you

How important is company culture to you? At Lending… Read More »
September 30, 2014

Welcome Vermont Investors!

Today, we’re thrilled to welcome residents of the state… Read More »
September 4, 2014

We filed to go public today

We filed a registration statement with the SEC today… Read More »
August 27, 2014

Our Billion Dollar Quarter

We’re excited to announce  that we’ve facilitated over $5… Read More »
July 8, 2014

Is Lending Club Available in My State?

Is Lending Club available in my state? That is… Read More »
July 7, 2014

5 Things Everyone Should Do Before a First Interview

After spending hours drafting your… Read More »
June 24, 2014

Lending Club Joins Senator Cory Booker to Discuss Improving Access to Capital for Small Businesses

Read More »
June 20, 2014