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Croudify claps back against last week's most talked about headlines about how online lenders are not verifying basic borrower information. It argues that i) that trend is decreasing quickly and ii) the alternative indicators that LC and others are using are working better than traditional data sources and providing a performance lift to loans.
Here the analysis showed us a completely opposite result. The loans for which Lending Club had decided not to verify the income has performed better historically and continue to outperform the overall population. This points to a very important finding that the preliminary indicators that Lending Club is using in identifying the fraudulent behavior is not only working it is working great and is providing a performance lift to loans. This is a very important discovery and points that what was true in old world with traditional lending is no longer true with the new world with Online lending and advance Machine Learning models and we as investors need to change our thinking accordingly.
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