Proposal of a new loan rating system by BitLendingClub

[BitLendingClub]

Hi all, I'd like to show you the rating system that we're going to implement in the next month or so. Please give me your feedback so we can make sure that we build the best system that we can.

Rating Factors
1. Collateral (in order of which ones we're planning on releasing first):
    a. Altcoins- litecoin, namecoin, primecoin, etc.
    b. Digital securities- cex.io, cryptostocks.com, etc.
    c. Financial securities- stocks, bonds, options, futures, etc. anything that can be transferred via one of the standard brokerages.
    d. Gift cards- Gyft (gyft.com), Amazon, Target, Walmart, etc.
    e. Digital property- domain names, twitter accounts, etc.

2. Identity: this is comprised of ID, address, phone, e-mail and income verification.

3. Trust: the trust factors include connecting accounts from PayPal, eBay, Amazon, bitcointalk.org, localbitcoins.com, etc.

4. Social: connecting social accounts, such as Facebook, LinkedIn, Twitter, Google+.

5. Payment: is the payment current, late 0-15 days, late 15-30 days, or late 30+ days.

Rating Chart


Rating System
Ratings are from Triple A (AAA) to D. In order for a user to be rated as triple A, they must post Collateral, be 80-100% ID verified, 80-100% Trust networks connected, 80-100% Social networks connected and they must not have any late payments. The rest of the ratings are easy to understand, but a person would automatically get a DDD rating if they're late on a payment AND they don't have collateral posted, regardless of their other statuses.

Please let me know if you have any comments on this. Any points of improvement? What would you like to see in our system that might make it worthwhile?
Best Regards,
Kiril Gantchev
CEO of BitLendingClub
www.bitlendingclub.com

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[1715263965]

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[DiamondCardz]

I approve of it if it at least only gives "green" ratings i.e the ones that look the best when someone offers collateral. Collateral is a massive factor in loans nowadays and it's good to see that the best ratings are the ones with collateral.

[BitLendingClub]

I approve of it if it at least only gives "green" ratings i.e the ones that look the best when someone offers collateral. Collateral is a massive factor in loans nowadays and it's good to see that the best ratings are the ones with collateral.

Thanks, I thought about this long and hard... I'm hoping that it will play out well on our website: www.bitlendingclub.com

It should take us about a month to implement the collateral, the additional network connections (social/trust) and the rating system as a whole. Please let me know if there are any other suggestions we should consider.

[Crypto.Conyo]

Hi Kiril.
Please consider this advices / suggestions to:

1d. Gift cards- Gyft (gyft.com), Amazon, Target, Walmart, etc.
--> they shouldn't be reedamable by the borrower, if lost in default case

3.,4. Trust/Social:
--> pls add this forum as well and possibly Localbitcoins.com rating

Number of loans opened at a time: max 2 (the second one possibly only for A/B rated users)

Even if restrictive, it should be enforced the use for collaterals. At the beginning BTCJam implemented this option, but since no one borrower used it, BTJam simply switched it off.

CC

[BitLendingClub]

Hi Kiril.
Please consider this advices / suggestions to:

1d. Gift cards- Gyft (gyft.com), Amazon, Target, Walmart, etc.
--> they shouldn't be reedamable by the borrower, if lost in default case

Of course, we would make sure that the borrower can't simply take their collateral back at will.

3.,4. Trust/Social:
--> pls add this forum as well and possibly Localbitcoins.com rating

Sorry, I forgot to add them in the list. This forum and localbitcoins.com are in fact in our list.

Number of loans opened at a time: max 2 (the second one possibly only for A/B rated users)

Even if restrictive, it should be enforced the use for collaterals. At the beginning BTCJam implemented this option, but since no one borrower used it, BTJam simply switched it off.

CC

Currently we limit it to one loan per borrower, we'll consider two loans for the AAA through BBB rated users. Thanks for the feedback. Please support our website while we're building these features.
Best Regards,
CEO of BitLendingClub
www.bitlendingclub.com

[howzar]

Maybe there are too many possible ratings? It would be good to have maybe 5 categories instead of this many!

[BitLendingClub]

Maybe there are too many possible ratings? It would be good to have maybe 5 categories instead of this many!

The standard credit rating systems tend to be just as granular. I feel like the granularity will allow people to better manage their investments in the long run, but if I do get more feedback that there are too many categories then I'll make the necessary adjustments. Thanks for the feedback tho, I hope that this is going in the right direction and we can help a lot of people!

Best Regards,
Kiril Gantchev
CEO of BitLendingClub
Join us in Amsterdam for Bitcoin2014

[kittucrypt]

I like the ratings. However, are the different bands based on any quantitative data or these are just your subjective divisions? The aim of the ratings is supposed to predict the default risk, one way or another. As an investor, I would like to create a diversified portfolio and the only way the ratings would help is if they are "quantitative" in nature.

[Rulishix]

I like the way that looks! I hope it is expanded upon a bit as suggested and maybe this site can really grow and not be a haven for scammers

[BitLendingClub]

I like the ratings. However, are the different bands based on any quantitative data or these are just your subjective divisions? The aim of the ratings is supposed to predict the default risk, one way or another. As an investor, I would like to create a diversified portfolio and the only way the ratings would help is if they are "quantitative" in nature.

I'm not sure I understand your question... perhaps your understanding of quantitative and mine are a bit different. The "quantitative" factors which result in the rating are shown in the table, they're not subjective. Perhaps you have something specific in mind when you say "quantitative." What would be a quantitative factor in your mind?