Understanding Prosper Borrower’s Credit Grade
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As stated on the Prosper’s website,
A Prosper credit grade is a letter grade that Prosper assigns you based on your credit score, for use solely in the Prosper marketplace. Prosper obtains your Experian Scorex PLUSSM credit score from your credit report, and assigns one of seven credit grades.
Understanding where Prosper is getting your credit score from will help you understand how Prosper assigns you a credit grade. If you check out the link provided earlier, you can learn more about this process but for now, I will include the table they show on their page.
| Grade | AA | A | B | C | D | E | HR |
| Score | 760 and up | 720 - 759 | 680 -719 | 640 - 679 | 600 - 639 | 560 - 599 | 529 - 559 |
Note that Prosper does not have a score lower than 528 listed so if you are below this HR grade, Prosper will not consider your request for a loan. I am unable to find a breakdown of Experian credit score ratings so I will use MyFico for a comparison here. Again, note here that the FICO score range is limited to 6 (as opposed to 7 by Prosper).
| FICO Score | 760 - 850 | 700 - 759 | 660 - 699 | 620 - 659 | 580 - 619 | 500 - 579 |
| Prosper | AA | A - B | B - C | C - D | D - E | E - HR |
So as you can see, the way Prosper will score a borrower will vary but it is obvious that your FICO score will not give you the best idea of which credit grade you will be in. As stated earlier, you would only be able to know which credit grade you are in with Prosper by looking at your Experian Scorex PLUSSM credit score. My, my, my, isn’t the credit scoring world confusing enough?
For the Borrower
If you are considering a loan, pay attention to your credit report and improve your credit score before you apply for a loan. You can always wait a year to take advantage of 12 months to improve your score.
For the Lender
As a Prosper lender myself, seeing the comparison between the Prosper grade and the FICO score really clarifies things for me. Especially knowing the credit grade floats between a wide range as you can see by those who would be graded A or B but may be considered “good” by FICO. In a sense, the Prosper grade is just a tad bit looser than FICO.
Comment by passivefamilyincome on 21 June 2008:
Mark - One thing that is also important to point out is that Prosper waives the monthly service fee on the AA loans which helps borrowers with the grade get funded.
passivefamilyincome’s last blog post..May 2008 - Family Budget Review
Comment by lulugal11 on 24 June 2008:
While the credit rating is a good guide people need to look at other things as well. I got a low B rating from Prosper even though all my credit scores were above 700. I did not get my loan funded on Prosper but I got it on Lending Club which gave me a rating that truly reflected my credit scores.
I pay my loan on time at LC and have never had a problem. I think people on Prosper just looked at the rating that Prosper gave me and did not want to take a risk on a low B person, when that was not a true measure of me. (three cheers for Lending Club!)
lulugal11’s last blog post..Win a Gas Card from How I Save Money!!
Comment by Dawn on 24 June 2008:
Thanks for this! It really does help clarify things for me - I am a new lender to Prosper myself.
Dawn’s last blog post..First Payment
Comment by Dividends4Life on 24 June 2008:
Interesting read!
Best Wishes,
D4L
Comment by MBL on 25 June 2008:
I wonder if the Experian Scorex Plus is the same as the credit score we get from Experian through MyFICO?
MBL’s last blog post..Make Your Own Shampoo
Comment by andy from free annual credit report on 27 June 2008:
I’ve always just known about FICO for the most part. It is good to know that the Prosper score is looked at as well, even though it is not as good as FICO. Thanks for the tip!