Upstart set out to improve how lenders decide who gets credit. Its models use many variables, including education, job history, and credit data, to predict the likelihood a borrower will repay, with the aim of approving more people at lower rates than traditional scores alone would. Borrowers apply online, often receive decisions quickly, and loans are funded by partner banks and credit unions.
The platform serves lenders as software and as a marketplace. Banks use Upstart to originate personal loans, auto loans, and home equity products, with automation that speeds approvals and reduces manual review. The company regularly tests its models for disparate impact, and has worked with regulators on fair lending, which remains a major concern for AI in credit.
Upstart is a public company, and its fees come from lenders and loan origination. Its results are sensitive to interest rates and capital markets, and lending decisions via algorithms must comply with laws requiring explanations. Alternatives for borrowers include SoFi, LendingClub, Prosper, banks, and credit unions, and competing technology providers include Zest AI and Pagaya. Upstart suits borrowers seeking personal loans online.