In the Wireless & Cashless module provided as part of Money & Markets Extra for the week ending Saturday, June 27, The Associated Press reported erroneously the name of the CEO of Vouch, a startup that dubs itself a "social network for credit." The correct name is Yee Lee.
A corrected version of the story is below:
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Vouch, a startup that dubs itself a "social network for credit," aims to use your social contacts to gauge if you are worthy of a loan - and how large.
Launched earlier this year, Vouch tries to differentiate itself in the alternative lending space by creating a social network for lending rather than using people's existing networks such as Twitter and Facebook, says CEO and co-founder Yee Lee, who was an early employee at PayPal. In essence, your friends vouch for your creditworthiness.
How it works:
To obtain a personal loan, you need to specify how much money you'd like to borrow and have a FICO score of 600 or greater. Then, you'll need to find at least one person to "sponsor" you and sign an agreement with Vouch. To do this, they have to agree to pay back a certain amount of your loan if you default. They choose the amount. The more people who "vouch" for you, and the better their credit scores, the more desirable your loan terms.
Who it's for?
Lee says new graduates and immigrants new to the country benefit from Vouch because they are unlikely to have a long, established credit history. It also helps people who are looking for the best possible rates for personal loans, for anything from consolidating credit card debt to paying for a new roof.