NYTimes Article Re: Upstart

There’s an article in yesterday’s New York Times entitled “No Credit Score? No Problem! Just Hand Over More Data”. They discuss Upstart and some competitors. Not much there that this board has not already discussed, but a couple of points caught my eye. They mention that Zest AI is working with Freddie Mac which recently began using the company’s tools to evaluate people who don’t fit traditional scoring models.
There has been discussion on this board about the potential TAM for Upstart if it could enter the mortgage industry and I wonder about this bit of information- forgive me if it was already discussed in the many posts about Upstart. Does this mean Zest AI is a first mover in providing AI for mortgages?

There’s also mention of UltraFico- a new score that FICO is piloting to augment its traditional model by taking into account more data points provided by borrowers. They say they can reach 15 million more people with it.



This is from a link shared in the NYT article…


“We applaud Upstart for participating in this transparent and rigorous fair lending testing and independent monitorship of their lending platform. We share the belief that the introduction of AI into the credit marketplace should disrupt and not replicate histories of racial discrimination and economic injustice directed at Black communities and other protected classes. Both traditional underwriting approaches and newer AI models can reproduce—or exacerbate—underlying inequality in society that uniquely burdens Black credit applicants. The question is whether lenders work to uncover disparities in their platforms and seek out alternative approaches. We look forward to working further with Upstart and the Monitor to uncover disparities in their platform and seek out alternative approaches—something we hope all lenders will commit to doing.”- Ashok Chandran, Assistant Counsel at LDF.

Speaks volumes about Girouard’s faith in his product and commitment to mission. This strengthens the overall story. There’s a broad tailwind to weed out racism and it’s always good when doing right, and making money for all involved, align.

Thank you Lucky Lady for sharing.

BD, back to 10% after post ER sale.