More On Verified Bank Accounts

As I had observed a few days ago, unverified bank accounts are statistically dangerous for loans. Over 83% of listings that closed with unverified accounts are showing signs of distress (late payments or in default). For mitigating this risk, it's important to understand what this represents.

All loans require a verified bank account, but Prosper does not require it be verified during the listing phase. If a fully funded listing indicates that it does not have a verified bank account, yet the listing was fully funded, the borrower had to get the account verified during the review period. So, what this statistic is indicating is that borrowers who couldn't or wouldn't verify their account in the listing phase are very likely to fall behind on payments.

For this reason, I only look at listings with verified bank accounts. This strategy only works as long as there are other lenders that don't mind unverified bank accounts, and, so far, that's not a problem.