Zopa. Neither a borrower nor a lender be!

mosso

Hi,

I'm about to prepare a case study on ZOPA.
I look for opinions on the subject. is any of you e ZOPA-user;) ?
I would be also thankfull for any comments on the ZOPA's model.

m

savvy

mosso wrote:

Hi,

I'm about to prepare a case study on ZOPA.
I look for opinions on the subject. is any of you e ZOPA-user;) ?
I would be also thankfull for any comments on the ZOPA's model.

m

Hi mosso, I have merged all threads that are linked to Zopa (apart from Martins thread which you will find a link to in this thread), to help you.
savvy

nrsql

>> I just got a loan - £5k at 6.6%
Don't they take 1%?

Which means that someone is lending/investing at 5.6%.
They must think this is pretty risk free (or didn't think).

CTT_2

YES, Definately avoid Zopa at low interest rates and go to the loan sharks. I dont so...

jamesalexander

Hi - I am James Alexander, Zopa's CFO.

There is no truth to the rumour that Zopa is in trouble.

On the contrary - Zopa is flourishing, with in excess of 16,000 members. The market is active with more and more people lending and borrowing at Zopa every day. Rates available on the markets are highly competitive to both lenders and borrowers - and Zopa remains unique in allowing people to lend and borrow from each other rather than a bank.

ccparkhill

If your post code isn’t in their database you can’t register, i.e. anybody in a relatively new property

mrcow

CTT wrote:

YES, Definately avoid Zopa at low interest rates and go to the loan sharks. I dont so...

Pardon?? Why would you want to do that when you could just shop around on this site and sort out some 0% borrowing

Towen_2

deemy2004 wrote:

Its probably the change of address.

Looks like to Zopa if you have changed your address within the last 5 years your a risk !

From what I understand the score comes direclty from Equifax so will not be influcence by time at address (current or previous). I suspect they ask for this information to obtain all your credit commitment information which sits on their database for 6 years. They would also you it to check for linked addresses and the alike as each credit commitment is reference by indivdual and address.

MoneyMachine wrote:

My credit score came out at 290!!!!
I recently had my credit rating back from Experian as 899 out of 1000. So whats the deal??
It seems that in order for me to obtain credit I need to choose lenders who use Experian (get good credit) rather than Equifax (turned down straight away.)

QUOTE]

I would not take it personally, as zopa say on their website,

A low credit score does not necessarily mean that you personally are a bad credit risk, but it means that people with your score are, on average, higher risk. Credit scores work well across groups of people, but can work badly on individuals.

So they are not saying you are high risk, but that they have put you into a group which, as a whole, is high risk.

High risk couls mean 10-20% chance of default, which also mean 80-90% chance of non-default!

If someone else (like equifax) put you in a low risk group (e.g. 0.1% chance of default) it means they are fairly sure you will not default.

A score of 290 from Experian means either they think there is a fair chance you will default, or more likely, you are unlukcy and are just making up the numbers for the 80-90% will will not default!!

It a bummer but that is how the scoring systems works. The funny thing is, because they work on groups and not individuals, both are right!!!

ManAtHome

Dunno if this is still relevent - around 10 years since I had any dealings with the credit reference agencies. Anyway, as at some moons ago, neither Experian nor Equifax published a 'raw' score, but used tailored scorecards for various clients. Theory was that you had a certain number of generally good or bad criteria plus an investigation of the clients bad debts to (try) determine links. So some clients would score poorly on (eg) number of searches whilst others would virtually disregard this category (normally by checking searches within previous month instead of previous year.

You could score quite highly for long times with the same address, bank, credit card(s), if you had a fixed-line phone, a couple of credit agreements with good payment records, although there tended to be an 'optimum' number of CCs/Loans (eg score less than zilch if none or more than 3 - this tended to vary between clients, but zero was generally bad news). Obviously CCJs and defaults also had a negative effect.

Anyone have any more current info.?

Towen_2

themselves. The CRAs provide generic bureau scores along with the raw characteristics which the clients then tweak so it works better for them. Some take the bureau score as a starting point and add to it (as it is pretty powerful) other start form scratch.

The CRAs, and normally the banks both, build different cards in the background for different populations (e.g. those with thin files vs other with lots of credit agreements, or different cards depending on your age) and then align them so the scores all look the same. This means something like a mortgage account might improve a score for one set of people (e.g. middle aged) while degrade the score for a different set of people (e.g. under 25s or over 60s). Therefore, general rules do not apply across these different populations as the bureau and banks attach a different meaning to the same information depending on which 'box' they feel you should fit in. Of course it's a pretty sensitive secret as to hoe each organisation splits the population up, but I know the Equifax and Experian have a different about 6 or 7 different populations each with its own rules for determining the credit score.