LendingClub Chief Executive Scott Sanborn told investors last month on the San Francisco-based company’s earnings call. “Across the board, you’re seeing a number of people, LendingClub included, kind of prudently pulling in and tightening a little bit on the credit they’re offering.”

Last quarter, the average personal loan in the U.S. went to a borrower with a 717 credit score, the highest ever recorded, according to preliminary figures from the credit-data provider PeerIQ. The typical borrower reported $100,000-plus in annual income, also a record. Fintechs are now so focused on borrowers with pristine credit that only about a quarter of their new unsecured loans this year have gone to households with below-prime credit scores, making the companies more conservative than credit unions, according to TransUnion.

It’s not just investors in loans who are hurting. LendingClub, which went public in 2014 at a market valuation higher than all but 13 U.S. banks — $8.46 billion — has since lost almost 90% of its value.

“We have tightened massively,” said Ashish Gupta, Prosper’s chief credit officer. Climbing delinquency rates on Americans’ credit cards — the lender uses the metric to assess whether households are able to pay their bills — are part of the reason why Prosper’s loan approval rate has fallen “dramatically,” he said.

https://www.americanbanker.com/articles/fintech-lenders-tighten-standards-become-more-like-banks

Get Our Holiday Gift- The Gift of Better Credit, Better Life.

Book a time slot with an expert, its FREE too: https://app.acuityscheduling.com/schedule.php?owner=16883150