Lending Club Listing Change on Collections

As a followup to my post in January on how all public filings are not equal, Lending Club made a big recent change to their loan listings.  I only just noticed it yesterday.

Check out below a listing I just purchased yesterday following my reinvestment approach.

Loan Listing I bought yesterday on LC

 

If you look at the last item in the credit history section, you see a new line item called Collections Excluding Medical. As I outlined in the Public Filings post, 1 out of 6 credit reports in the US now have a medical collection on them. The reasons vary from actual non-payment to the patient not even knowing they owed and it was already sent to collections.

In the equipment finance industry, medical collections have become completely disregarded unless they are very sizable in amount like a non-payment of $5000 that implies a known procedure done but may not have been paid for.  Most medical collections are very small, under $500.

Both Prosper and Lending Club have been evolving the credit methods they use and one form of FICO, FICO 08 excludes very small collections with a balance of less than $100. This may be a factor in LC's inclusion of this line item. Regardless, this is one of those cases where more information is definitely better and this helps us investors with better decision making.

About the author

Stu Stu Lustman, the author of this post, is a Credit Analyst by trade trying to bring Commercial Credit Analysis techniques to the world of Peer to Peer Lending. Check me out on Twitter, LinkedIn and Google+

Leave a Comment