From this graph I saw three things:
- The lower the credit rating the longer the loan description a borrower writes. (The blue line.)
- Lenders tend to fund loans with higher than average character counts. (The red line.)
- Of those loans that are funded, the ones that went on to become Paid tended to have fewer characters than the average funded loan. (The grey line.)
Let's see if these trends hold up for more recent listings. First, we'll look at the number of characters in the listing description, by credit grade, for Listings in 2009:
And now for 2010:
Let's revisit the three conclusions:
- The lower the credit rating the longer the loan description a borrower writes. (The blue line.)
This seems even more true now than it did before. Before 2008 there was a peak in characters at around the D rating and then a decline. In 2009 and 2010 we see some very small drops from one credit grade to the next, but for the most part borrowers with a worse credit grade write longer descriptions than borrowers with better credit grades.
- Lenders tend to fund loans with higher than average character counts. (The red line.)
This continues to hold true. We still don't know if lenders are funding loans because they have longer descriptions or because long descriptions correlate with some other factors that affect default rate beyond the Prosper rating (low delinquencies, few inquiries, etc) but longer descriptions definitely get funded more.
- Of those loans that are funded, the ones that went on to become Paid tended to have fewer characters than the average funded loan. (The grey line.)
This does not seem to remain true. It sure looks to me like the Paid/Current descriptions have roughly the same number of characters as the average funded listing. At this point I would posit that this conclusion from my post on Sunday is false.
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