How does the LendUp Ladder work for installment loans?

The LendUp Ladder was created to help customers access larger loan amounts with lower rates over time by paying loans back, making on-time payments, and completing our education courses. We strongly believe that actions like these tell us a lot about our customers that traditional credit scores alone just can’t.

Millions of Americans today are stuck in a system where the only loans available when they need money are predatory, trick people into debt traps, and aren’t reported to traditional credit bureaus. And, there is no path up, because many lenders only look at traditional credit scores.

Because of this, it is LendUp’s mission to provide anyone with a path to better financial health.

What does LendUp look at when reviewing installment loan applications?

While the installment loan application for returning customers continues to evolve over time, some of the most important information that we can use to offer larger loan amounts or lower rates is whether previous loans were paid off on time and in full. On-time payments are especially important when we review applications for a loan with a number of payments - like installment loans.

We recognize that our customers have worked hard to make on-time payments and we want to make sure that approval odds for our installment loans reflect that effort—with on-time payments boosting the likelihood of approval and late payments having the opposite effect.

Another reason that we place extra importance on LendUp loan history with installment loans is that many of these loans report every payment to the three major credit bureaus - factoring into your official credit score.

Typically, on-time payments are good for your credit score and late payments are bad. Because of this risk to customer credit scores, we consider on-time payments for previous loans one of the most important pieces of information we have.

So, what’s new?

Effective January 28, 2019, we’re updating our installment loan application to more heavily consider information like repayment history.  As a result of this update, some customers will be declined for certain installment loan applications, while other customers who have historically been declined may be approved.

Additionally, in California, Louisiana, Missouri, and Texas, we’re improving our product so that customers who are declined for a Prime Loan can still apply for an Installment Loan. We’re excited that this new feature will expand access to loans!

Staying focused on the mission

LendUp was founded with one clear, straightforward purpose: to provide anyone with a path to better financial health.

As we learn more about our customers, we’ll continue improving our application process to give access to better products.