Word analysis has gone in and out of vogue among Prosper lenders. Right now, it's in vogue here at Prosperous Land. The premise is that you can get hints about the quality of a listing based on words that appear in the listing description. I've been messing with it to try and get a statistically significant edge (proving it provides an edge, now there's a dicey proposition), but some interesting things pop out when you mess with the datasets enough.
I have used the 2602 repaid loans and 2387 defaulted, bankrupt, or 4+ month late loans for my number crunching, as of the April 1 dataset. For each word, I look at the ratio of appearances in good loans versus the appearances in bad loans to find those words that are good indicators of loan quality. The top ten good and bad ones that have appeared in at least 100 listings are below:
|Word||Appeared In Good Loan||Appeared In Bad Loan|